Balancing the Cash Book (Cambridge (CIE) IGCSE Accounting): Revision Note

Balancing the cash book

How do I balance the cash book?

• Balance the cash columns just like any other ledger account

  • Ignore the other columns

  • Remember the balance is always brought down onto the debit side

• Balance the bank columns just like any other ledger account

  • Ignore the other columns

  • The balance will be brought down onto the:

    • debit side if the business has money in the bank

    • credit side if the business is overdrawn

• Do not balance the discount columns

  • You just need to total them up

  • They will likely be different totals

Where do I put the totals for the discount columns?

• The cash book is the book of prime entry for discount

  • It records the discounts allowed and received

  • It is not part of the double entry system for discount

• Enter the discount in the relevant accounts

• The total on the left-hand side is the discount allowed

  • Debit the whole total to the discount allowed account

    • Label the entry as “cash book”

    • You do not need to put a separate entry for each transaction

  • Credit the relevant trade receivables accounts in the sales ledger

• The total on the right-hand side is the discount received

  • Debit the relevant trade payables accounts in the purchases ledger

  • Credit the whole total to the discount received account 

    • Label the entry as “cash book”

    • You do not need to put a separate entry for each transaction