Short Answer

The cash book and pass book are both used to record bank transactions, but they are maintained by different parties. The cash book is maintained by the business, while the pass book is maintained by the bank.

The cash book records all cash and bank transactions from the business point of view, while the pass book shows transactions from the bank’s point of view. Due to this, their balances may differ.

Detailed Explanation:

Differences between cash book and pass book

Meaning and nature

The cash book is a book of accounts maintained by the business to record all cash and bank transactions. It includes both receipts and payments and acts as both a journal and a ledger.

On the other hand, the pass book is a record maintained by the bank for its customers. It shows all deposits and withdrawals made in the bank account. It is considered an official record of the bank.

Maintained by

The cash book is prepared and maintained by the business or account holder. All entries are recorded by the business based on its transactions.

In contrast, the pass book is maintained by the bank. The bank records all transactions related to the customer’s account and provides the pass book to the customer.

Point of view

The cash book shows transactions from the business point of view. For example, deposits are recorded on the debit side, and withdrawals are recorded on the credit side.

The pass book shows transactions from the bank’s point of view. Here, deposits are shown as credit, and withdrawals are shown as debit. This difference in perspective often causes confusion.

Recording of transactions

In the cash book, transactions are recorded when the business makes or receives payments. It depends on the records maintained by the business.

In the pass book, transactions are recorded when the bank processes them. Some transactions may be recorded later due to processing time, which leads to differences between the two books.

Balance shown

The cash book shows the balance of cash and bank as per the business records. It helps the business know how much money it has.

The pass book shows the balance as per the bank records. This is the actual balance available in the bank account according to the bank.

Purpose

The main purpose of the cash book is to maintain a record of all cash and bank transactions of the business.

The purpose of the pass book is to inform the customer about all transactions in their bank account and provide an official record.

Conclusion

The cash book and pass book are both important records in accounting, but they differ in many ways such as meaning, maintenance, and point of view. Understanding these differences helps in preparing a Bank Reconciliation Statement and maintaining accurate financial records.