• Bank and cash transactions within a cash book
• Small cash transactions within a petty cash book
• Invoices received or issued within day books
• Specialized adjustments within a journal.
These are known as books of prime entry (or primary accounting records) as they show the first stage of the bookkeeping process prior to the posting of the information into the ledger accounts.
The cash book is used to record the transactions affecting both the business's bank account and also its un-banked cash (notes and coins), shown within a cash account.
The petty cash book
Most organizations spend cash on low value items such as tea and coffee, postage stamps, window cleaning, and so forth. These items are considered too immaterial (that is, insignificant) to be left within the main cash book, so they are given their own book within the system, known as the petty cash book, which contains the petty cash account. This is usually operated under an imprest system, where the petty cash has a 'float' of a predetermined amount, which is topped up at regular intervals.
Analyzed cash books and petty cash books
There can be a great variety of expenses paid out of the cash book and petty cash book, but they can usually be grouped into a relatively small number of categories. These can be shown in an extended version known as an analyzed cash book or petty cash book. This makes it easier to complete the double entry bookkeeping, by allowing totals for the period to be debited to their respective accounts in the General Ledger.
