State the reasons of the following statement: The balance in the cash column of the cash book is always a debit balance where as that in the bank column is sometimes credit also.Contra entries in the cash book are not posted into the ledger.The cash account and the bank account are not posted in the ledger.

a. Cash column of cash book will always show debit balance because cash payment can never exceed…

Answered: State the reasons of the following…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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State the reasons of the following statement:

The balance in the cash column of the cash book is always a debit balance where as that in the bank column is sometimes credit also.
Contra entries in the cash book are not posted into the ledger.
The cash account and the bank account are not posted in the ledger.

Definition Definition Financial journal in which only cash-related transactions are recorded. Cash transactions are posted chronologically in the cash book, which is also called a subsidiary book. All the cash receipts are recorded on the debit side and all the cash payments are recorded on the credit side. An important point to remember is that the cash book never shows a credit balance; only a debit balance is shown in the cash book.

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