This module covers the cash book as both a book of original entry and a ledger account: recording receipts and payments, separating bank from cash, contra entries, petty cash under the imprest system, and why the bank column may differ from a bank statement. Check the current Cambridge IGCSE Accounting 0452 syllabus page for the exact wording of each content point in your exam year.
What should you already know?
You need the basic idea of debit and credit from double-entry foundations and a feel for source documents such as receipts and cheque counterfoils. You also need to add and subtract whole numbers and two-decimal amounts accurately. If you can balance a simple ledger account, you are ready.
An orienting example
Sari Stationery starts the week with RM 450 in the till and RM 3,200 in the bank. On Monday it sells goods for RM 290 in cash, then pays RM 210 in cash wages. Later, a customer’s cheque for RM 380 arrives and is banked.
Step 1, choose the column: the sale and the wages move physical money, so they go in the cash column. The cheque goes through the bank, so it goes in the bank column.
Step 2, choose the side: money coming in is a debit on the left. Money going out is a credit on the right.
Step 3, balance each column: cash is 450 + 290 − 210 = RM 530. Bank is 3,200 + 380 = RM 3,580.
Nothing here is difficult arithmetic. The marks are won by the column and the side, which is why the lessons below spend their time there.
In what order should you study the lessons?
- Enter receipts and payments with correct columns: start here, because the layout of the cash book and the discount columns underpin everything else.
- Distinguish bank and cash movements: a cheque, a card payment and a handful of notes are not the same column.
- Record a contra entry: cash paid into the bank or withdrawn from it appears on both sides of the same book.
- Restore a petty-cash imprest: a separate small book with analysis columns, topped up by the exact amount spent.
- Compare cash-book balance with bank statement timing: the first step towards bank reconciliation.
After these, try the cash books and petty cash practice set. The double-entry and ledger trainer lets you test where each entry lands in the ledgers.
What are the common traps?
- Discount in the wrong place. Discounts allowed and received go in the discount columns, not inside the cash or bank amounts.
- Card or transfer recorded as cash. If the money moved through the bank, it belongs in the bank column, even if the customer stood at your counter.
- Contra entries posted to the ledger. A contra has both entries inside the cash book already, so no ledger posting follows.
- Restoring the float instead of the spending. Under the imprest system the restoring payment equals the total spent, not the full float.
- Changing the cash book for timing differences. Unpresented cheques and uncleared deposits are already in your cash book, so they do not need a new entry.
How should you use the practice set?
Attempt each question on paper first, with the columns ruled out. Then open the worked answer and compare line by line, not just the final balance. A balance can match by luck while the discount or column is wrong.
If you keep making one kind of slip, note it in the mistake log and retest queue and retest it a few days later. Students who want someone to watch their column choices as they work can consider online one-to-one Accounting tuition, where an assigned teacher can follow each entry as it is made.