cash books
DESCRIPTION
Cash Books. Cash books. To try make accounting simple, the cash account and the bank account are sometimes put together. When 2 or more accounts are put together, we call it a book. Dr. Cash a/c. Cr. Aug 1 H.Jun 2,500 M.Mak 356 Sept1 Balance b/d 2,856. Aug 1 F.Dak 100 - PowerPoint PPT PresentationTRANSCRIPT
Cash Books
Cash booksTo try make accounting simple, the cash account and the bank account are sometimes put together. When 2 or more accounts are put together, we call it a book.
Dr CrCash a/cAug 1 H.Jun 2,500 M.Mak 356
Sept1Balance b/d 2,856
Aug 1 F.Dak 100
Aug31Balance c/d 2,756
Dr CrBank a/cAug 5 W. Win 1,456 A.Sam 392
Sept1Balance b/d 1,848
Aug 1 R.Tan 400
Aug31Balance c/d 1,448
Dr Cr
Cash Bank Cash Bank
Aug 1 H.Jun 2,500 Aug 1 F.Dak 100
M.Mak 356 Aug 5 R.Tan 400
Aug 5 W.Win 1,456
A.Sam 392
Aug 31Balances
c/d Aug 31Balances
c/d 2,756 1,448
Sept 1Balances
b/d 2,856 1,848 Sept 1Balances
b/d
Folio ColumnsIn real life a business would have thousands of cash and bank transactions, so it is not enough just to have the basic narration.
Dr CrCash a/cAug 1 H.Jun 2,500 M.Mak 356
Sept1Balance b/d 2,856
Aug 1 F.Dak 100
Aug31Balance c/d 2,756
We call this narration
We call this narration
More information is needed, so in large businesses, an extra column is added. This is called a folio column. To minimise the risk of any mistakes, we only complete the folio column when the double entry (narration in 2 T-a/c) has been completed.
Example… a receipt of cash from C.Kelly whose T-a/c was on page 45 of the sales ledger book and the cash is record on page 37 in the cash book, the information in the folio column would appear…Cash book – SL 45Sales ledger – CB 37
Folio columnsOften, a business will receive cash from a customer
and pay it in to the bank on the same day, so the
cash T-a/c will show a debit and credit on the same
page in the cash book. Therefore in the folio
column there is no need to add additional
information. We simply use ‘ȼ’ (contra) in the folio
column.
ȼ 1,000
Cash ȼ
Discounts (page 154)
A business may have two types of discounts in their books:
•Discounts allowed – cash discounts allowed by the
business to its customer.
•Discounts received – cash discounts received by a
business from its suppliers when they pay their suppliers.
Ledgers
All the T-a/c for M.Sloan
All the T-a/c for D.Pavit
All the T-a/c for e.Farma
These are all ‘sales’ T-accounts, so we group them all together
All the T-accounts for sales we put together, this is called a ledger
Sales
ledgerWe do the same for all the purchases accounts (purchase ledger). Any ‘one-off’ accounts we put in a general ledger
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