Cash Book and Ledger

- PART I: Foundation - Rule 10 LP Account Rules -

Requirement of Written Documentation

Rule 10 of the Legal Practitioners’ Account Rules provides that every legal practitioner shall have properly written books and accounts as may be necessary to:

1. Show his dealings with:
   • Client’s money held, received, or paid;
   • Any other money dealt with through a client’s account;
2. Distinguish such money held/received on account of separate clients, AND distinguish such money from other money held by him on any account.

Required Records - Rule 10(2)

- PART II: The Cash Book -

Definition

The Cash Book is a subsidiary book which forms the basis of preparing the principal book called the Ledger.

It is the book for recording detailed particulars of all money received and paid. It is a book of cash receipts, payments, and transactions that pass through cheques or other paper-based or electronic payment methods.

3 Types of Cash Book

1. Petty Cash Book;
2. Single Column Cash Book;
3. Double Column Cash Book.

- PART III: Petty Cash Book -

Definition

The Petty Cash Book records day-to-day transactions or small disbursements. It is useful in a law firm for the office cashier to record transactions relating to “Floats” - an imprest given for a period of time.

3 Features of a Petty Cash Book

1. Records day-to-day small disbursements over a period (weekly, monthly, bi-monthly);
2. Funds petty expenses without burden of going to the bank daily;
3. Used when transaction amount is about ₦100,000 or less.

Contents of a Petty Cash Book

Element	Notes
Heading	Subject of the record - e.g. Crystal Chambers Cash Book for July 2022
Debit	Drafted at top left - indicates funds posted on that side are incoming
Credit	Inserted at top right - indicates outgoing funds
Columns (5)	RECEIPTS, DATE, PARTICULARS, FOLIO, AMOUNT (FOLIO can also come after RECEIPTS; “F” can replace FOLIO)

Postings into the Cash Book

Field	How to Post
Receipt	Money received at top of the column; balance after deducting expenditures at the bottom
Date	Posted in the order transactions occurred
Particulars / Details	Actual transactions with accurate descriptions. Related items can be grouped (e.g. chairs, tables = “Furniture”)
Total / Amount	Total amount expended on each transaction
Folio	Reference part - transactions numbered. In petty cash book, post CB (cash book)
Balance C/D	Balance after deducting expenses from total receipt. Posted under DETAILS; amount under TOTAL. Date = last day of month
Balance B/D	Last post - total balance carried into next month. Posted under DETAILS; amount under RECEIPT. Date = first day of next month

Analytical Petty Cash Book