Beginner level · Module 1: Accounting Basics and Daily Bookkeeping · Lesson 2 of 3
Keeping a Cash Book
Record every receipt and payment with a running balance you can check against cash in hand.
In this lesson you will
- Record receipts and payments in a cash book
- Reconcile the cash book with cash counted
Key concepts
cash bookreceipts and paymentsrunning balancecash count
The lesson
A cash book lists every receipt and payment in date order, with a reference to the supporting document and a running balance.
Closing balance = opening balance + receipts − payments. At the end of each day, count the cash and compare it with the balance.
Keep separate cash books for each bank account and for mobile money, and record transfers between them in both.
Step by step
- Enter the opening balance.
- Record each receipt and payment with a reference.
- Calculate the running balance.
- Count cash and reconcile.
A week in a shop's cash book
Receipts and payments in date order with a running balance that is checked against the cash counted.
| Day | Details | Receipts | Payments | Balance |
|---|---|---|---|---|
| Opening | Balance brought forward | 500,000 | ||
| Mon | Cash sales (receipts R101–R118) | 320,000 | 820,000 | |
| Tue | Rent for the month (voucher PV21) | 300,000 | 520,000 | |
| Wed | Cash sales (R119–R133) | 280,000 | 800,000 | |
| Thu | Stock purchase (invoice 4471, PV22) | 450,000 | 350,000 | |
| Fri | Cash sales (R134–R156) | 410,000 | 760,000 | |
| Sat | Casual wages (PV23) | 150,000 | 610,000 |
What the data shows
Receipts total 1,010,000 SSP and payments 900,000 SSP, so the closing balance is 500,000 + 1,010,000 − 900,000 = 610,000 SSP.
Every line names its receipt or voucher, so each figure can be traced to evidence.
Recommendation
Count the cash on Saturday evening; if it is not 610,000 SSP, find the difference that day while the transactions are fresh.
Practice activity
Complete the week's cash book from the practical activity.
Expected result: A cash book whose closing balance matches the cash counted.
Check your understanding
-
How is the closing balance calculated?
Show answer
Opening balance + receipts − payments.
-
Why count cash daily?
Show answer
To find differences early while they are easy to explain.
Taught live by an instructor — online or in person. Free course lessons are for self-study and do not lead to a certificate — see registration options.