Briefly state how the cash book is both journal and a ledger.
The cash book functions as both a journal and a ledger. As a journal, it is a book of original entry where all cash transactions are recorded in chronological order, similar to how transactions are entered in a journal. This eliminates the need to record cash transactions separately in the journal.
As a ledger, the cash book takes the form of a cash account. The left side records cash receipts (debits) and the right side records cash payments (credits). It is balanced in the same manner as a ledger account, providing the cash balance. Hence, no separate cash account is required in the ledger when a cash book is maintained.
Explanation
The cash book serves the dual purpose: it is a journal because it records transactions as they occur (book of original entry), and it is a ledger because it functions as the cash account with debit and credit sides, eliminating the need for a separate cash account in the ledger. This is supported by the textbook which states: 'It serves the purpose of both journal as well as the ledger (cash) account. It is also called the book of original entry. When a cashbook is maintained, transactions of cash are not recorded in the journal, and no separate account for cash or bank is required in the ledger.' Additionally, the format with debit and credit sides and balancing like a ledger confirms its ledger role.