Principal and Auxiliary Books.
Principal books are those from which posting is done, together with the Ledger ; auxiliary books are those which are used as memorandum books, and not as posting mediums. In Set III, we shall continue the Journal as the only posting medium, and introduce the Cash Book as an auxiliary book, and at a later stage as a principal book.
Books of Original Entry.
These are books of account in which transactions are first recorded, and are the only. ones admitted as proof of an account in courts of law. They may be either principal or auxiliary books, since a principal book, say the Journal, may have its origin in an auxiliary book, say a Blotter or Counter Check Book.
The Dr. side of the Cash Book shows the receipts, and the Cr. side shows the payments ; the difference between the two sides shows the balance of cash on hand.
There are four parts to an entry in the Cash Book : (1) the date, (2) the name of the account opposed to cash, (3) the explanation, and (4) the amount. The account, opposed to cash on the Dr. side, shows from whom the cash was received if on account, or for what received if not on account ; on the Cr. side, it shows to whom the cash was paid if on account, or for what it was paid if not on account.
Cash Book for Set III