Question

Cash column of cash book can never have _______ balance.

• A. Credit
• B. Debit
• C. Zero
• D. None of the above

Answer 1

The correct option is A Credit

Cash book is a book in which all transactions relating to cash receipts and cash payments are recorded. It starts with the cash or bank balances at the beginning of the period.

On the left side, all-cash transactions relating to cash receipts (debits), and on the right side all transactions relating to cash payments (credits) are entered date wise. When a cash book is maintained, a separate cash book in the ledger is not opened.

The cash book is balanced in the same way as an account in the ledger. But it may be noted that in the case of the cash book, there will be always a debit balance because cash payments can never exceed cash receipts and cash in hand at the beginning of the period.