Figure 11. (Reduced in size)
A cash book will be rather expensive if we have it made precisely as we want it, especially if we have the column headings printed in. There is no doubt that printed headings make a neater book, but in many cases, the advisability of incurring the extra expense is open to doubt. Considering the great variety of stock pages published by various manufacturers, there is rarely an excuse for ordering specially ruled and printed sheets. Special ruling are very expensive, especially when we can order but a small supply. It is found that the sheets shown in Fig. 11 give perfect satisfaction. The lower sample, having 20 columns, will take care of almost any Exchange, and by trimming off the two outer columns of the right hand page, we can secure a capacity of 36 columns. This would prevent us from keeping Cash Received and Cash Disbursed on pages that confront each other, but as the number of pages used for the former usually exceeds greatly those necessary for the latter, this objection has little weight. If convenience so dictated, there is no reason why the two sides of the Cash Book or Cash Account could not be kept in different parts of the book or even in separate books. This would lead to economy of pages.
The upper of the two forms shown in Fig. 11 would be suitable for small Exchanges where a large number of columns are not required, as the left hand side could be used for cash received and the right for cash disbursed. Several of the right hand pages would have to be wasted each month on account of the greater number of entries on the debit side. Some Exchanges use a form similar to the upper one of Fig. 11 except that it is printed and ruled to order and contains a greater number of columns than that shown in the cut. The writer knows of one Exchange that has as many as twenty columns on each side of its Cash Book. Such forms, however, are exceedingly expensive and should be considered more or less of a luxury. The forms shown in Fig. 11 cost $1.75 per hundred retail (without printed headings) and measure 11 × 14 inches, being 11 inches on the binding side. A sectional post binder to fit any number of these sheets can be obtained for $3.25 retail.
The Cash Book is used to give a detailed record of all cash transactions. On the left hand or debit side is entered all cash received and on the right hand or credit side is entered all cash paid out; the difference in the sum totals of the respective sides showing at any time the amount of cash on hand. All items on the credit side of the Cash Book are posted to the debit side of some account in the Ledger and vice versa. (Bank drafts, sight drafts and checks belong in the cash account; notes and time drafts belong to Bills Receivable and Bills Payable accounts.) Our posting is done only when the books are closed, at the end of the month or when necessity arises, thus saving an enormous amount of work. As we keep no private ledger account for each of our creditors or customers, it follows that the totals of each column in our Cash Book are posted as lump sums to the credit of or as a debit against the ledger accounts of Bills Receivable, Bills Payable, or one of the Exchange’s departments, etc. All miscellaneous receipts that do not properly belong to one of the departments, customers, etc., are taken up under “Interest and Discounts”.
An important advantage of this method of handling our cash sales is that we are preparing, as we go along, all the data that will be required by the Inspector. A discussion of the Credit side of the Cash Book is postponed until the subject of Purchase Records is taken up. The above described operations are shown graphically in Fig. 12, where the heavy lines represent operations of recording or posting and the dotted lines show possible checking operations. The item of “Other Cash” is, of course, checked against Form 25, Form 6, or elsewhere, depending upon circumstances.
Fig. 12.