Accounting

Difference between cash book and savings book

Main difference

The main difference between Cash Book and Passbook is that Cashbook keeps records of cash transactions, whereas banks provide the Passbook to their account holders to record payment and withdrawal of money.

Cash book vs. savings book

A cash book is a financial periodical that contains all receipts and cash payments, including bank values ​​and withdrawals, while the bank assigns the book to create the records of payments and withdrawals. Companies keep the box, while banks print it. Cashiers carry cash books while bankers carry savings books. In the cash book, cash is placed on the debit side of the cash book, while in the savings book, cash is placed on the credit side of the savings book.

In the cash book, cash is withdrawn from the credit side of the cash book, while in the savings book, cash is withdrawn from the debit side of the savings book. The cash book is not signed by the cashier, while the banker approves the book after each business deal. The cash book matches after a specified period, while the savings book balances after each transaction.

The cash book debit balance indicates that there is cash in the bank and the credit balance indicates that the bank is overdrawn, while the book debit balance confirms that the bank is overdrawn and the credit balance shows money in the bank. Grounding a cash book is optional, while preparing a savings book is necessary. In the cash book, the checks are deposited into the accounts on the same date they are deposited in the banks, while in the savings book, the checks are deposited into the accounts only at the moment the check is known . In the cash book, assortments and payments are entered into the cash book after viewing the book, while in the book expenses are recorded in the book first.

Comparative chart

Pay book Passbook
Maintains the record of cash transactions It is provided by banks to preserve the history of spending and withdrawing money.
Created by
Business Bank
Maintained by
Cashier Banker
Cash deposit
Debit side of the cash book Credit side of the book
Preparation
Optional Mandatory
Check deposit register
Deposit date When the amount is collected from the debtor
Register of issued checks
Date of issue When the amount is paid to the creditors.
Balance
After a particular time After every transaction

What is the cash book?

The cash book means a book that keeps all the records of the cash communications. The cash book records all of the company’s cash transactions on commercial paper. The document is cooperative on the basis of the account book. It is a companion book. Cash columns and bank columns work the same as cash account and bank account.

The cash is initially recorded in the cash book and then sent to the related ledger accounts. Also, a cash book is a temporary cash account in the book. A corporation that properly maintains a cash book does not need a requirement to open a cash account in its account book. Cashbook is maintained on a regular basis, which helps prevent fraud. All transactions in the cash book have two sides, debit which is on the left side and credit which is on the right side. All cash gains are recorded on debt and all cash expenses are recorded by date on credit.

Checks that are deposited for collection are recorded on the actual date of deposit, and when checks are issued by a creditor, they are recorded on the exact date of issue. The debit side of the cash book shows that the cash is in the bank and the credit side shows that the bank is overdrawn. Cashiers maintain the cash book, but the formation of a cash book is optional. The types of cash book are single cash book, double column cash book and triple column cash book.

What is Passbook?

A passbook means a book that the bank issues to its account holder to create records of the number of payments and withdrawals. With the help of a savings book, banks update their clients on the position of their accounts. Passbook records bank transactions in a savings account. It is the particular duplicate of the customer’s account in the bank’s book. Mark payments, withdrawals, bank rights, etc. throughout an exercise.

Initially, the bank generates the customer’s account records in its ledger. After that, they copy into a notebook and then give it to the client. All customer transactions with the bank are recorded in the bank’s passbook. The bank writes the passbook, but it remains the property of the investor, and a client can monitor the entries made to his account by the bank. Passbook also has a debit or credit side to record all operations. The cash deposit is presented on the credit side and the reserve withdrawal is presented on the debit side.

Checks are inserted for money on the date the amount is actually drawn from the borrower’s account, and checks are issued to creditors when the bank repays the extension to the creditor. The debit side of the book shows an overdraft while the credit side of the book shows cash in the bank. It is mandatory to create and maintain a savings book.

Key differences

  1. The cash book keeps the record of cash transactions, while the savings book is issued to have a history of deposits and withdrawals.
  2. Cashbook is organized by the company; on the other hand, banks subtitle a savings book.
  3. The cash book is optional. On the contrary, the savings book is mandatory.
  4. In the cash book, the income is shown on the debit side, on the other side, in the account book, the income is shown on the credit side.
  5. Cash registers payments on the credit side, while the book enters the amount on the debit side.
  6. The cash book shows the cash in the bank in the balance on the debit side; on the other hand, in the savings book, the debit balance shows an overdraft.
  7. In the cash books, the credit limit expresses an overdraft. On the other hand, the credit balance of the savings book shows the cash in the bank.
  8. The cashier carries the cash book. In contrast, a passbook is backed by the banker.

Final Thought

The bank settlement report is organized with the help of the cash book and the savings book to check the transactions that both books are the same or not. The statement also summarizes the source of the lack of agreement between the cash book and the savings book.

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