Advantages of Cash Book - QS Study
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Advantages of cash book

The book in which all cash transactions (either cash is received or paid) are mainly recorded according to dates, is called ‘Cash Book’. It is a financial journal that contains all cash receipts and payments, including bank deposits and withdrawals.

Saves time and labour: When cash transactions are recorded in the journal a lot of time and labour will be involved. To avoid this all cash transactions are directly away recorded in the cash book which is in the form of a ledger.

To know cash and bank balance: It helps the manager to know the cash and bank balance at any point of time.

Mistakes and frauds can be prevented: Standard balancing of cash book reveals the balance of cash in hand. In case the cash book is maintained by business apprehension, it can evade frauds. Discrepancies if any can be recognized and rectified.

Effective cash management: Cash book provides all information regarding total receipts and payments of the business apprehension at a particular period. So that, effective policy of cash management can be formulated.

Cash Book renders the following benefits:                                      

  • Daily cash receipts and cash payments are simply ascertained.
  • Cash in hand at any time can simply be ascertained through Cash Book balance.
  • Any fault in the book can be simply detected at the instance of certification of cash.
  • Any defalcation of money can be detected while validate cash.
  • Since cash is confirmed day by day, this Book is for all time reserved up-to-date.