What is the purpose of preparing a cashbook?

The purpose of preparing a cashbook is to systematically record all cash transactions, including cash receipts and payments, to maintain an accurate record of cash flow. It helps businesses track their cash balance, ensuring that they have sufficient funds for operations and obligations. Additionally, a cashbook aids in identifying discrepancies, facilitating better financial management and decision-making. Overall, it serves as a crucial tool for monitoring financial health and ensuring accountability.