Scribd
Upload
9 views

Cashbook

This document provides an overview of cash books, including their format, how to enter and balance them, and the use of folio columns for cross-referencing. It explains the concept of cash discounts and how to record them in the cash book. The learning outcomes emphasize understanding the structure of cash books and the importance of discounts in accounting.

Uploaded by

sm22000141
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
9 views

Cashbook

This document provides an overview of cash books, including their format, how to enter and balance them, and the use of folio columns for cross-referencing. It explains the concept of cash discounts and how to record them in the cash book. The learning outcomes emphasize understanding the structure of cash books and the importance of discounts in accounting.

Uploaded by

sm22000141
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 18

Slide 9.

Cash books

Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 9.2

Learning objectives
After you have studied this chapter, you
should be able to:
➢ explain the format of two-column and
three-column cash books
➢ enter up and balance-off cash books
➢ use folio columns for cross-referencing
purposes

Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 9.3

Learning objectives (Continued)


➢ make the entries for discounts allowed
and discounts received both in the cash
book and, at the end of a period, in the
discount accounts in the general ledger
➢ make similar entries in separate columns
in the cash book for other recurring items

Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 9.4

What is the cash book?


➢ The cash book is the cash account and the
bank account put together in one book.
➢ This means we can record all money
received and paid out on the same page.
➢ In the cash book, the debit column for cash
and the debit column for bank are together,
and the credit column for cash and the
credit column for bank are together.

Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 9.5

Enter the following transactions in the Cash Book with Cash, Bank and Discount column for A R Khan
and Co. for December, 2016 (all figures in Pula):

Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 9.6

Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 9.7

The cash account and bank account

Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 9.8

The cash book

Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 9.9

Folio columns
➢ Just like in a T-account, the cash book has a
detail column that contains the name of the
account in which the other part of the double
entry has been entered.
➢ More information can be given by using folio
columns.
➢ A folio column is drawn up in the cash book
and the name of the other book and the page
number is entered against every entry.
Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 9.10

The cash book (with folio)

Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 9.11

Cash discounts
To encourage early payment of accounts, a
business may accept a smaller sum in full
settlement if payment is made within a certain
period of time.
➢ Discounts allowed – cash discounts allowed
by a business to its customers when they pay
their accounts quickly.
➢ Discounts received – cash discounts received
by a business from its suppliers when it pays
what it owes them quickly.
Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 9.12

Discount columns in the cash book


➢ To reduce the number of entries in the
general ledger, discount columns can be
added to the cash book.
➢ The discount allowed column is added to
the debit side of the cash book and the
discount received column is added to the
credit side of the cash book.
➢ The total of these columns will be posted to
the relevant discount accounts.
Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 9.13

What happens if there is an overdraft?

Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 9.14

Learning outcomes
You should have now learnt:
1. That a cash book consists of a cash
account and a bank account put together
into one book.
2. How to enter up and balance a two-column
cash book, i.e. one containing a debit and a
credit column for the bank account, and a
debit and a credit column for the cash
account.
Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 9.15

Learning outcomes (Continued)


3. That the bank columns in the cash book
are for cheques and any other transfers of
funds that have been made into or out of
the bank account.
4. That a folio column is included in the cash
book so as to help trace entries made into
accounts in the ledgers and so as to
provide assurance that the double entries
have been made.
Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 9.16

Learning outcomes (Continued)


5. That cash discounts are given to
encourage people to pay their accounts
within a stated time limit.
6. That ‘cash discount’ is the name given for
discount for quick payment even where the
payment was made by cheque or by direct
transfer into the bank account, rather than
by payment in cash.

Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 9.17

Learning outcomes (Continued)


7. That cash discounts appear in the profit
and loss part of the income statement.
8. How to enter up and balance a three-
column cash book, i.e. one containing a
debit and a credit column for the bank
account, a debit and a credit column for the
cash account and a debit and a credit
column for discount.

Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 9.18

Learning outcomes (Continued)


9. That the discounts columns in the cash
book make it easier to enter up the books.
They act as a collection point for discounts
allowed and discounts received, for which
double entry into the general ledger is
completed when the totals are transferred
to the discount accounts in the general
ledger, usually at the end of the month.

Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy