Learning objectives of this article:
- What is difference between cash book
and pass book?
Explanation of Difference:
Cash book is written by depositor and pass
book is written by the bank. All
transactions related to bank are recorded in
the bank column of the cash book and these
transactions are also recorded in the pass
book by the bank.
Following are the main points of difference
between cash book and pass book:
Cash Book
|
Pass Book
|
|
1. |
It is written by
the depositor. |
1. |
It is
written by the bank but remains in
the depositor's possession. |
|
2. |
Money deposited is
recorded on the debit side and money
withdrawn on credit side. |
2. |
Money
deposited is entered on the credit
side and withdrawn on the debit
side. |
|
3. |
A check deposited
for collection is recorded on the
date of deposit. |
3. |
It is
recorded on the date when it is
actually collected from the debtor's
bank. |
|
4. |
A check when issued
to a creditor is recorded on the
date of issue. |
4. |
It is
recorded when it is paid by the bank
to the creditor. |
|
5. |
Its debit balance
shows cash at bank and credit
balance shows bank overdraft. |
5. |
Its
debit balance shows bank overdraft
and credit balance shows cash at
bank. |
|
Examples are always the best way to
understand. Consider the following example:
Example:
Enter the following transactions in the
cash book and pass book:
| Jan.
2005 |
|
$ |
| 1. |
Mr. X opened a
current account with Standard
Chartered Bank. |
80,000 |
| 3. |
Paid Mr. N by check. |
8,000 |
| 5. |
Received a check
from Mr. S and deposited into the
bank. |
16,000 |
| 8. |
Withdrew from bank
for office use. |
6,000 |
| 10. |
Paid rent by check. |
10,000 |
| 14. |
Bank charges debited
by bank |
400 |
| 17. |
Paid Mr. Z by check |
3,000 |
Solution:
Cash Book (bank column
only)
|
Date |
Particulars |
V/N |
L/F |
Bank |
Date |
Particulars |
V/N |
L/F |
Bank |
|
1.1.05 |
Cash A/C |
|
C |
80,000 |
3.1.05 |
Mr. N A/C |
|
7 |
8,000 |
| |
Mr. S A/C |
|
5 |
16,000 |
8.1.05 |
Cash A/C |
|
C |
6,000 |
| |
|
|
|
|
10.1.05 |
Rent A/C |
|
9 |
10,000 |
| |
|
|
|
|
14.1.05 |
Bank Charges A/C |
|
11 |
400 |
| |
|
|
|
|
17.1.05 |
Mr. Z A/C |
|
13 |
3,000 |
| |
|
|
|
|
|
|
|
|
68,600 |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
68,600 |
|
|
|
|
68,600 |
| |
|
|
|
|
|
|
|
|
|
Pass Book (A copy
of depositor's account in banks ledger)
|
Date |
Particulars |
Debit (withdrawals) |
Credit (deposits) |
Balance |
|
1.1.05 |
Cash |
|
80,000 |
80,000 |
|
3.1.05 |
(Mr. N) Check No....... |
8,000 |
|
72,000 |
|
5.1.05 |
(Mr. S) Check No....... |
|
16,000 |
88,000 |
|
8.1.05 |
Cash: Check No....... |
6,000 |
|
82,000 |
|
10.1.05 |
Check No.......paid |
10,000 |
|
72,000 |
|
14.1.05 |
Bank charges |
400 |
|
71,600 |
|
17.1.05 |
(Mr. Z) Check No....... |
3,000 |
|
68,600 |
| |
|
|
|
|
It may be noted that the cash
book is showing a debit balance
(cash at bank) or $68,600 and the
pass book (depositor's A/C) is
showing a credit balance of $68,600.
Both balances are equal but opposite
generally these two balances do not
agree. To understand the reasons of
disagreement, read our
causes of disagreement between cash
book and pass book article. |
