Chapter 7

The main cash book brings together the separate cash and bank transactions together in one 'book'.

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  • Created by: Melonball
  • Created on: 20-04-14 17:09

Uses

  • Cash transactions
    -receipts in cash
    -most payments for cash
  • Bank transactions
    -all receipts by cheque and bank transfer
    -all payments by cheque and bank transfer 
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What it looks like

(http://financetrainingcourse.com/wp-content/uploads/2010/09/093010_0256_Accountings5.png)

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Where things go + functions.

The debit side is used for receipts/ income

The credit side is use for payments 

Both sides contain sparate columns for cash and bank transactions.

Discounts allowed/recieved are not included in double entry. Depending on what the question says, you may need to work out the figure and deduct it away from the money recieved/paid.

Functions; It's a subsidary book for cash/bank transactions
                 It forms part of the double entry book keeping system.   

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Bank receipts and payment terms!!!

Standing order: regular payments made form the bank account. They are the same amount each time and are made by the bank on behalf of the customer with the customers instructions to do so. Eg monthy subscriptions to magazines etc

Direct Debits: Payments made from the bank for the customer. The person being paid originates the payment. DD's are often used where money paid varies and payment dates alter.

Credit transfers: Receipts/payments. Receipts from customers who have paid the amount due through the banking system directly to the person who is being paid's bank account. Payments to suppliers/employees which go straight to their bank accounts.

Bank charges/interest: Made by the bank for services provided. Charges are usually calculated in relation to the number of transactions during the period, 

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