Cash Book may be defined as the record of transactions concerning cash receipts and payments. This is a very popular book and is maintained in all types of organizations – big, small, profit or non-profit organizations. This book helps the trader to know regularly the Cash Balance and/or Bank Balance on Hand. The Cash Book plays a dual role as Journal as well as Ledger.

When a Cash Book is maintained, transactions of cash are not recorded in the Journal. Since transactions are recorded for the first time in the Cash Book, it is a book of original entry. The transactions once entered in the Cash Book need not again be posted to separate Cash Account and the cash balance can be arrived from the Cash Book at any time. So it is a book of final entry. The Cash Book fulfils the functions of both a Ledger Account and a Journal.

The Cash Book is divided into two sides, the left hand side and the right hand side. The left hand side is the debit side used to record the cash receipts and the right hand side is the credit side used to record the cash payments. On receipt, Cash Account is debited and on payment, Cash Account is credited.