ABSTRACT
We have noted already that the principal elements in the accounting records are the cash book and the ledger. The other subsidiary records which make the system work are ‘day books’ (‘journals’).
Cash book The cash book is in effect, the ‘ledger account for cash’. It shows receipts and payments of cash. The example below shows typical details. (They come from Problem 4.10: Plumridge Engineering Limited.)
Cash receipts are entered on the left-hand side (increases in an asset account), and cash payments on the right-hand side. Accountants refer to the left-hand side as the ‘debit’ side (abbreviated to Dr), and call the right-hand side the ‘credit’ side (Cr).
