Cashbook
Aperçu
Welcome to the detailed overview of Cashbook in Financial Accounting. A cashbook is an essential part of accounting that focuses on recording all cash transactions within an organization. It serves as a primary accounting record that helps in tracking the flow of cash in and out of the business.
The objectives of Cashbook include determining the cash float, differentiating between two and three columnar cashbooks, understanding trade and cash discounts, examining their effects in the books of accounts, and identifying various petty cash expenses.
There are two main types of cashbooks: single columnar cashbook and double columnar cashbook. The single columnar cashbook records only cash transactions, while the double columnar cashbook has two columns for recording cash and discount transactions separately.
**Single Columnar Cashbook:** In a single columnar cashbook, transactions such as cash received or paid are recorded in a single column without separating cash and discount transactions. This type of cashbook provides a straightforward overview of cash movements.
**Double Columnar Cashbook:** On the other hand, a double columnar cashbook contains two columns: one for cash transactions and another for discount transactions. This structure allows for better organization and tracking of both cash and discount entries separately.
When it comes to trade and cash discounts, it's crucial to differentiate between them. Trade discounts are offered by suppliers to encourage large orders or prompt payments, while cash discounts are provided to customers for early payment of invoices. These discounts have specific accounting implications, influencing the financial records of the business.
The effects of trade and cash discounts in the books of accounts vary based on their timing and calculation methods. Trade discounts are usually accounted for before the sale is recorded, reducing the sales revenue. In contrast, cash discounts are deducted from the total amount receivable after the sale is made, impacting accounts receivable and revenue.
Petty cash expenses refer to small, regular expenditures that are paid for in cash to cover minor operational costs. Keeping a petty cashbook helps in monitoring these expenses and ensuring proper documentation of all disbursements for accountability and financial control.
In conclusion, mastering the concepts and practices related to Cashbook is vital for maintaining accurate financial records, tracking cash flow effectively, and making informed business decisions. Understanding the nuances of cash transactions, discounts, and petty cash management is key to efficient accounting processes.
Objectifs
- Examine the effects of trade and cash discounts in the books of accounts
- Differentiate between two and three columnar cashbooks
- Understand the concept of Cashbook
- Learn how transactions are recorded in two and three columnar cashbooks
- Understand the difference between trade and cash discounts
- Identify various petty cash expenses
Note de cours
Évaluation de la leçon
Félicitations, vous avez terminé la leçon sur Cashbook. Maintenant que vous avez exploré le concepts et idées clés, il est temps de mettre vos connaissances à lépreuve. Cette section propose une variété de pratiques des questions conçues pour renforcer votre compréhension et vous aider à évaluer votre compréhension de la matière.
Vous rencontrerez un mélange de types de questions, y compris des questions à choix multiple, des questions à réponse courte et des questions de rédaction. Chaque question est soigneusement conçue pour évaluer différents aspects de vos connaissances et de vos compétences en pensée critique.
Utilisez cette section d'évaluation comme une occasion de renforcer votre compréhension du sujet et d'identifier les domaines où vous pourriez avoir besoin d'étudier davantage. Ne soyez pas découragé par les défis que vous rencontrez ; considérez-les plutôt comme des opportunités de croissance et d'amélioration.
- What are the different types of cashbooks used in accounting? A. Single column and double column cashbooks B. Double column and triple column cashbooks C. Single column and triple column cashbooks D. General cashbook and petty cashbook Answer: B. Double column and triple column cashbooks
- When a business makes a cash sale, how is the entry recorded in a two-column cashbook? A. Only in the receipts column B. Only in the payments column C. In both the receipts and payments columns D. In the sales column Answer: A. Only in the receipts column
- What is the purpose of the petty cashbook in accounting? A. To record all transactions of the business B. To track small cash expenditures separately C. To record major purchases of the business D. To maintain the cash float of the business Answer: B. To track small cash expenditures separately
- How are trade discounts treated in the cashbook? A. Recorded as a deduction from the total sales B. Recorded as an addition to the total purchases C. Ignored in the cashbook D. Recorded in the petty cashbook Answer: C. Ignored in the cashbook
- In a three-column cashbook, where are discounts allowed recorded? A. Discount column B. Receipts column C. Payments column D. Suspense account Answer: A. Discount column
- What is the purpose of the imprest system in petty cash management? A. To deter employees from stealing cash B. To ensure there is always a fixed amount of cash available C. To allow employees to take cash whenever needed D. To eliminate the need for petty cash transactions Answer: B. To ensure there is always a fixed amount of cash available
- How are cash refunds recorded in the cashbook? A. Recorded as sales B. Recorded as purchases C. Recorded in the discount column D. Recorded in the petty cashbook Answer: D. Recorded in the petty cashbook
- What is the main function of a two-column cashbook in accounting? A. To record only cash receipts B. To record all financial transactions C. To track cash payments only D. To record cash sales and purchases Answer: D. To record cash sales and purchases
- Which column of a cashbook would show the opening balance of cash on hand? A. Receipts column B. Payments column C. Discount column D. Balance column Answer: D. Balance column
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Questions précédentes
Vous vous demandez à quoi ressemblent les questions passées sur ce sujet ? Voici plusieurs questions sur Cashbook des années précédentes.
Question 1 Rapport
a. The cash book of Dupe Enterprises showed an overdrawn balance of #216,126 and her bank statement also showed #905,625 overdrawn. On 31/12/2016, a detailed examination of the records showed the following differences:
(i) A cheque drawn for #697,550 had been entered in the cash book as #365,050.
(ii) A standing order of #420,000 and bank charges of #8,750 entered in the bank statement has not been recorded in the cash book.
(iii) Bank lodgment of #1,922,375 on 27th December 2016 has not been credited by the bank.
(iv) Dividend received of #315,000 had been recorded in the bank but not entered in the cash book.
(v) Cheques paid to suppliers totalling #1,165,500 has not been presented for payment.
(vi) A cheque for #700,000 received from Tunde was dishonoured by the banki but no entry had been made in the cash book.
(vii) A cheque of #256,813 received from a customer was entered as a payment in the cash book.
(viii) A cheque for #350,000 recorded in Dupe Enterprises cash book had been credited by the bank to Dudu Enterprises' account.
(ix) An amount of #1,050,000 received from customer was paid directly to Dupe Enterprises account but no entry was made in the cash book.
You are required to prepare:
Dupe Enterprises Adjusted Cash Book
b. The cash book of Dupe Enterprises showed an overdrawn balance of #216,126 and her bank statement also showed #905,625 overdrawn. On 31/12/2016, a detailed examination of the records showed the following differences:
(i) A cheque drawn for #697,550 had been entered in the cash book as #365,050.
(ii) A standing order of #420,000 and bank charges of #8,750 entered in the bank statement has not been recorded in the cash book.
(iii) Bank lodgment of #1,922,375 on 27th December 2016 has not been credited by the bank.
(iv) Dividend received of #315,000 had been recorded in the bank but not entered in the cash book.
(v) Cheques paid to suppliers totalling #1,165,500 has not been presented for payment.
(vi) A cheque for #700,000 received from Tunde was dishonoured by the banki but no entry had been made in the cash book.
(vii) A cheque of #256,813 received from a customer was entered as a payment in the cash book.
(viii) A cheque for #350,000 recorded in Dupe Enterprises cash book had been credited by the bank to Dudu Enterprises' account.
(ix) An amount of #1,050,000 received from customer was paid directly to Dupe Enterprises account but no entry was made in the cash book.
You are required to prepare:
Bank Reconciliation Statement as at 31st December 2016
Question 1 Rapport
Credit purchases are always put at 150% of the total cash paid to suppliers
Calculate the closing balance of the ledger account