Difference Between Cash Book and Cash Account

Edited by Diffzy | Updated on: May 31, 2023


Difference Between Cash Book and Cash Account

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In business, exchanges can occur in two ways: cash or credit. To record cash transactions, businesses maintain separate books or records, namely cash books and cash accounts. The cash book is an auxiliary book that records all cash-related transactions, such as receipts or payments.

Similarly, a cash account is a record where cash receipts and payments are recorded. These two differ in that the cash book is an auxiliary book, while the cash account is a record account.

Many accounting students often confuse these two and struggle to differentiate between them. There is a fine line of distinction between cash books and cash accounts, which we will elaborate on in this article.

Cash Book vs Cash Account

The main difference between a cash book and a cash account is that a cash account is also used to record all cash transactions of a business. However, it is a record account where a posting is made only when the initial entry of the transaction has been made elsewhere.

Difference Between Cash Book and Cash Account in Points

Parameter of ComparisonCash BookCash Account
PurposeIt serves a dual purpose as a diary and record. No need for cash transactions to be kept in the diary.It serves a single purpose as a record.
TypesThere are three types of cash books: single, double, and triple-entry cash books.There is only one type of cash account.
NarrationCash books have descriptions that come after the entries.Descriptions do not follow cash accounts.
DependencyCash books are not dependent on any other books as it is the book of original entry.Cash accounts are dependent on the diary day.
Order of recordingTransactions are directly recorded in a cash book.The cash transactions are first recorded in a diary book and later transferred to the cash account.

Definition of Cash Book

The Cash Book, also known as the book of original entry, records the cash receipts and cash payments of a business for a specific accounting year. The Cash Book functions similarly to a Cash Account, but it is preferred when dealing with large transactions.

There are three types of Cash Books:

  1. Single-entry cash book, also known as a cash book with a cash section.
  2. Double-entry cash book, also known as a cash book with cash and bank sections.
  3. Triple-entry cash book, also known as a cash book with cash, bank, and discount sections.

In addition to the above three, another type of Cash Book is maintained known as the 'petty Cash Book,' used for recording petty cash expenses of the business.

In every business, transactions occur in two ways: either with cash or on credit. When it comes to recording cash transactions, businesses use two tools: cash books and Cash Accounts. The Cash Book serves as a record for all cash payments and receipts.

A Cash Book is the primary entry point for all cash transactions, including funds to and from the bank. The Cash Book has two sections: credit and debit.

There are three types of Cash Book formats: single-entry, double-entry, and triple-entry.

  1. Single-entry: A single-entry cash book includes only cash transactions conducted by a business. Transactions made using a credit card are not recorded in a single-entry cash book.
  2. Double-entry: A double-entry cash book records transactions conducted through cash as well as transactions conducted via a bank. Loan transactions are not included in a double-entry cash book.
  3. Triple-entry: A triple-entry cash book format has three columns on each side for receipts and payments. This format is commonly used by large companies that conduct transactions in multiple modes, such as cash, banking, and also allow and receive cash discounts.

A Cash Book and Cash Accounts differ slightly from each other. The Cash Book is specifically maintained as a record (secondary book) for recording cash transactions, while a Cash Account is a record within the ledger. Cash Book directly records cash transactions, while a Cash Account is a part of the ledger where entries are posted from the Journal.

The Cash Book is a type of secondary book where all cash receipts and cash payments relating to sales are recorded. When a cash transaction occurs, the Cash Book is the first book where the inflow or outflow of cash resulting from such a transaction is recorded.

All cash receipts are recorded on the debit side, and all cash payments are recorded on the credit side.

However, it is important to note that a key characteristic of a Cash Book is that despite being a book of original entry, it serves the purposes of both a Journal and a Ledger. It functions as a record and thus serves as a Cash Account as well. Therefore, if you maintain a Cash Book separately, there is no need to maintain another Cash Account.

The Cash Book fulfills the purpose of a Cash Account. Thus, to account for cash transactions, I will keep only one aspect of the transactions in the ledger because the other aspect is to be kept in the Cash Book. For example, the payment of salaries for staff will be debited to the account (Salary A/c) with a simultaneous credit in the Cash Book.

The features of the Cash Book are as follows:

  1. In the Cash Book, I record only cash transactions in chronological order.
  2. It can function as both a journal and a ledger simultaneously.
  3. The debit side records all cash receipts, while the credit side records all cash payments.
  4. The Cash Book only keeps track of one aspect of the transaction, which is the cash.
  5. Details or descriptions of transactions are provided in the Cash Book.

Definition of Cash Accounts

A Cash Account is an accounting record used to record daily monetary transactions of a business. Cash receipts are recorded on the debit side of the account, while cash disbursements are recorded on the credit side.

Since cash is an asset, the Cash Account follows the basic accounting principle of debiting what comes in and crediting what goes out. This means that when cash is received, the Cash Account is debited, and when cash is disbursed, the account is credited.

A Cash Account serves the purpose of an account and is especially useful for tax purposes. By using cash accounting, you only pay taxes on the cash you have actually received, providing a clear picture of your cash flow and available funds for tax purposes.

Cash accounting is beneficial for small businesses and individuals with fluctuating income.

For larger companies that deal with significant amounts of cash, cash accounting can be a useful method to track expenses and revenues without the need for full accrual accounting.

However, if a Cash Book is maintained, a separate Cash Account is not necessary as adjustments will be directly reflected in the Trial Balance.

The features of a Cash Account are as follows:

  1. It serves as an accounting record.
  2. Detailed descriptions of transactions are not provided in the Cash Account.
  3. If a Cash Account is opened in the Ledger, all cash transactions are first recorded in the Journal. The postings are then made from the Journal to the Cash Account.
  4. The Journal Folio column is provided, indicating the page number of the Journal where the transaction is recorded for the Cash Account.
  5. The debit side records all cash receipts, while the credit side records all cash payments.

Key Differences Between Cash Book and Cash Account in Points

The following are the significant differences between a cash book and a cash account:

  1. A Cash Book is a book of original entries, while the Cash Account is a ledger account, and entries are posted in the Cash Account only when the original entry of the transaction is made elsewhere.
  2. The Cash Book is an auxiliary book, whereas the Cash Account is a ledger account.
  3. In the actual Cash Book, entries are accompanied by descriptions, whereas in a Cash Account, the entries are not accompanied by descriptions.
  4. The Real Cash Account has a journal folio column, whereas the Real Cash Book has an account folio column.
  5. A Cash Book consists of original entries, while a Cash Account is a ledger account, and the posts here are originally placed elsewhere.
  6. Cash books have descriptions that follow each entry, but in a Cash Account, there is no need for descriptions.
  7. A Cash Book is an auxiliary book, while a Cash Account is a ledger account.
  8. Cash books have account folios, while cash accounts have journal folios. Cash books have an account folio column that indicates the page number of a ledger account from where a transaction was posted.
  9. Cash accounts have journal folios, which represent the page number from where the transaction was posted.
  10. Cash books come in three types - single entry, double entry, and triple entry, while cash accounts are in a single format.

Cash accounting, in simple terms, is a part of the general ledger where you make entries related to cash. On the other hand, the cash book is the original record of cash receipts.

Cash accounts can be considered the main book and are part of the ledger, while the cash book is considered the subsidiary book and forms the primary part of the original entries.


  1. Only cash transactions are recorded.
  2. Debit side is used for receipts, and credit side is used for payments.


In business, the use of a Cash Book or a Cash Account is very common, whether it is a small or a large organization. Cash plays a significant role in the smooth running of the business. Therefore, for proper and efficient recording of cash transactions, companies use either Cash Books or Cash Accounts.

A Cash Book in accounting refers to a document where all cash payments and cash receipts are recorded, including deposits and withdrawals from the bank. It serves as a book of original entries for a business.

In summary, a Cash Book is a record where all cash transactions are recorded. On the other hand, a Cash Account is essentially a sub-account within an account. You can think of a Cash Book as something that serves the purpose of both a journal and a ledger, with the Cash Account organized like an account.


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"Difference Between Cash Book and Cash Account." Diffzy.com, 2024. Thu. 29 Feb. 2024. <https://www.diffzy.com/article/difference-between-cash-book-and-cash-account-1202>.

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