Bank cash book
A bank cash book is a multi-ledger column or financial journal that records cash receipt and loan disbursement including bank deposit and withdrawals in form of notes, coins and cheques.
It is prepared by operating level officers of government of Nepal to maintain the record of cash and baking transactions under AGF No. 5.
It follows the accounting principle of double entry system which is prepared on the basis of journal voucher and trial balance checks whether posing made in Bank cash book is correct or not.
Objectives of Bank Cash Book
To make systematic and permanent record of all cash and banking transactions.
To control banking and cash related transactions effectively and efficiently.
To show position of cash account, bank account, budget expenditure account, advance account, and miscellaneous account.
To provide completion of the double effect of each transactions.
To estimate the amount of cash requirement and disbursement.
To show bank balance of the office at given period of time.
To supply necessary and reliable information and data for preparing monthly statement and other financial reports.
Importance & Advantage of Bank Cash Book
It is required to prepare trial balance in order to check arithmetic accuracy in financial transactions made by a government of Nepal.
It is useful to check misuse, misappropriation and internal theft of cash.
It keeps safe and control cash in a proper & suitable manner.
It helps to cross check balance as shown by the bank statement.
It is useful in reducing changes of tried and misuse.
It shows amount of cash balance, expenditure, and bank balance, advance given and cleared at any time after each transactions.
It provides reliable data or information which help in preparing financial statement and reports.
Factors that should be consider while preparing Bank cash book
Journal voucher should be prepared before posting any transaction into bank cash book.
Only cash transactions are to be posted in Bank Cash Book chronologically.
Those amounts that are debited and credited in journal voucher are entered in debit and credit side of appropriate column respectively.
Financial transaction related to cash, bank, advance and budget expenditure are recorded in allotted columns of bank cash book.
The transactions which do not relate to cash, bank, advance and budget expenditure account are recorded in miscellaneous column.
Advance transactions are to be posted in 3 different accounts in bank cash book.
Advance fund and budget release are the only transaction recorded as receipt in bank cash book.
Petty cash fund expenses are recorded in bank cash book only when reimbursements of such expenses are made.
At the end of each month, total of each account should be drawn an added to the total upto the previous month.
Bank cash book was introduced as a part of new accounting system to minimize the misappropriation or embezzlement of cash. Such book is considered as a mechanism to control and safeguard cash at the bank or any other organization.
