Q.Distinguish between a Cash Book and a Cash Account.

A Cash Book is both a book of original entry AND a ledger account combined into one; a plain Cash Account, in a business that doesn't maintain a Cash Book, would be only a ledger account.

In a system without a Cash Book, a cash transaction would first be journalised (Cash A/c Dr/Cr with the other account) and then posted, like every other journal entry, to a separate Cash Account in the ledger.

A Cash Book eliminates this two-step process: the cash transaction is entered DIRECTLY into the Cash Book (skipping the Journal entirely) and the Cash Book itself, being ruled exactly like a ledger account (debit side for receipts, credit side for payments, with a running/closing balance), serves AS the Cash Account. This is why a business that maintains a Cash Book never also maintains a separate Cash Account — doing so would double-record every cash transaction.

A frequent misunderstanding is thinking a separate Cash Account must still be opened in the ledger alongside the Cash Book — this would double-count every cash t …