The correct answer is C. Cash book records cash payments and cash receipts.
A cash book is a financial accounting journal used to record all cash receipts and cash payments. It is a subsidiary ledger of the general ledger and is used to track the flow of cash in and out of a business.
Cash receipts are recorded in the cash book when money is received from customers, clients, or other sources. Cash payments are recorded in the cash book when money is paid out to suppliers, employees, or other expenses.
The cash book is a very important document for businesses because it provides a record of all cash transactions. This information can be used to track cash flow, prepare financial statements, and identify trends in business activity.
Here is a brief explanation of each option:
- Option A: Cash payments. Cash payments are recorded in the cash book when money is paid out to suppliers, employees, or other expenses.
- Option B: Cash receipts. Cash receipts are recorded in the cash book when money is received from customers, clients, or other sources.
- Option C: Cash payments and cash receipts. Cash payments and cash receipts are both recorded in the cash book.
- Option D: Neither cash payments nor cash receipts. The cash book does not record neither cash payments nor cash receipts.