Course Content
New Accounting Model (Exam-2009)
Books references: 1. Account Code (Volume III). 2. Chart of Accounts (Issued by CGA). 3. Manual Accounting Principles. 4. Accounting Policies and Procedures Manual.
Private: DAO Part-I Examination 2024 (Fresh Candidates) Past Papers
About Lesson

What is the difference between a cash book and a bank statement?

Let’s explore the differences between a cash book and a bank statement:

  1. Cash Book:
    • Purpose: The cash book is used to record all transactions related to cash, checks, money orders, or postal orders within a business.
    • Recording Transactions: Whenever cash is deposited in the bank, the cash book (specifically the bank column) is debited. Similarly, when a check is issued to a supplier, an entry is made in the bank column on the credit side of the cash book.
    • Business Perspective: Businesses maintain cash books to stay informed about their position with the bank.
    • Format: Cash books typically have two or three columns (including a bank column) to facilitate recording bank-related transactions.
Bank statement
  1. Bank Statement:
    • Purpose: The bank statement is a record maintained by the bank itself to ensure its position with the account holder (the business or individual) is always known.
    • Content: The bank statement lists all the bank’s transactions with the account holder. It includes deposits received, checks paid, interest earned, bank fees, and other relevant details.
    • Frequency: Banks usually provide account holders with a monthly bank statement.
    • Format: Bank statements are often presented in a format that shows credits (increases in liabilities) and debits (reductions in liabilities) to the account holder’s personal account.


  • When David deposits money with the bank, he records it in the debit side of his cash book.
  • The bank, on its side, maintains David’s personal account and records all deposits received from him in the credit column of his bank statement.
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