CASHBOOK:  This in effect refers really as part of the principle book, the ledger. The cashbook is made up of the cash and the bank account taken out of the ledger and then bound separately for the sake of greater convenience. It is also a book of original entry but it is not a subsidiary book because cash receipts and that of cash payments are not recorded in the subsidiary books.

Note: “All items in the cashbook are posted into ledger. All the receipts on the debit side of the cashbook are posted to the credit side of the ledger accounts. But then all the payments on the credit side of the cashbook are posted to the debit of the ledger account that is concerned”.

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