CASH
Cash Receipts and Cash Payments
Cash Records
O Journals are described as
“books of originating entry” It is
to these books that source
documents are transferred.
Managing Cash
O Documentation of cash
transactions is essential.
O Cash documentation must be
reliable and verifiable
To the Issuer
To the issuer of the receipt it is
important:
O As a document verifying the
accounting transactions
O As a means of achieving further
sales by providing a record of
customers
O To discourage theft by staff who
handle cash
To the receiver of the
receipt it is important:
O As proof that the goods have
been paid for.
O As evidence that the goods
were purchased from the
business whose name appears
on the receipt
O As a record of expenditure in
the accounting records
Journals have four distinctive
characteristics
O They are exclusive records meaning they
only recognise one type of transaction. EG:
only cash receipts are entered into the
cash receipts journal
O Data is entered in chronological order
O Journals may be divided into
multiple columns to provide
more valuable information to
users, such as owners and
managers
O When a double entry system is
in place, journals provide totals
to post to the ledger
Cash Payments
O Cash payments may be made in the
form of cash (notes and
coins),cheques or EFT Payments.
O When paying by cheques a delay
occurs between receiving a cheque
and receiving the funds from the
cheque. Despite this delay, goods or
services that are paid for by cheque
are treated as cash sales or cash
fees.
The Cheque
1. The cheque number that is recorded in the
Cash payments journal
2. The date the cheque is written
3. The name of the payee (The person or
business receiving the funds)
4. The purpose of the cheque (on the butt)
5. The opening balance (on the butt)
6. Closing balance
7. Signature
8. BSB and Account Details
Create cheques with the consecutive cheque
numbers 225- 228 for Howards Fishing
(ABN) 11 123 234 345, bsb 089 267,
Account number 1245667, Opening
Balance $2000 for the following transactions
1. Pay B. Black $300 for Tree cutting service
2. Pay National Australia Bank $30 for Bank
fees
3. Pay Telstra $75.60 for Phone Bill
4. Pay Caltex $98 for petrol
Cash Payments
Journals
A Cash Payments Journal records all
payments made by the business.
What do they look Like
?
Cash Receipts Journals
Dat Particula Rec . Debto Cash Other Sundri Bank
e rs No. rs Sales Reven es $
$ $ ue $ $
Cash Payments Journal
Dat Particul Cheq Credit Cash Wa Other Sundri Bank
e ars ue ors Purchas ges Expe es
No. es nses
Classifying CR or CP
O Owner Contributed cash Capital
O Sold goods for cash
O Paid wages
O Purchased goods for cash
O Brought a vehicle for cash
O Paid Advertising
O Received a Loan
O Sold equipment for cash
O Owner withdrew cash
O Received cash from a debtor
O Bought printer on credit
O Received rent revenue
O Paid Rent
O Repaid Loan
O Bank statement shows interest
charged by bank
O Paid a creditor
O Received bill from accountant
O Owner withdrew stock
