Archive for November 2nd, 2007

02 11 2007

Common Terms like Dishonored Cheque & Bank Overdraft Relating To The Cash Book

Posted by: slang in g. Cash Book

Very often, we hear terms like dishonored cheque and bank overdraft.

Dishonored cheque is a cheque which, when presented, is REFUSED payment by the bank because of insufficient fund or because it is not in order.

Bank overdraft is a facility that allows the current account holder to overdraw from his account up to an agreed sum. (more…)

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02 11 2007

Cash Account & Bank Account & The Cash Book

Posted by: slang in g. Cash Book

Normally, Cash account and Bank account are simple to understand. Perhaps this is for the unfamiliar.

In business, the owner/responsible officer would keep a small amount of money in the office and most of the cash is kept in a current account at a bank.

Cash account simply records money kept in the OFFICE. (more…)

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02 11 2007

Cash Book

Posted by: slang in g. Cash Book

If someone ask you whether the Cash book is a book of original entry- what would you say - yes or no? (more…)

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02 11 2007

Revision Notes:Book Of Original Entry, Type Of Transaction Recorded And Related Source Document

Posted by: slang in REVISION NOTES

From earlier articles, we understand that every transaction is recorded in a book of original entry from a source document.

 

Append below the various book of original entry, the transactions being recorded and the related source document(s) being used.

 

Book Of Original Entry:

(A) GENERAL JOURNAL

Transaction(s) recorded :

  1. Opening entries
  2. Closing entries
  3. Adjusting entries
  4. Correction of errors
  5. Transactions not recorded in other special journals

Related Source Document(s)

  1. Invoice received and invoice issued
  2. Memo
  3. Other relevant documents.

Salient point to note:

The reason for item 2 & 3 of source document is that they are specifically tied to any other original book of entry hence these are really “general” in nature. Though general in nature, the bookkeeper still need to record such transactions as they are relevant for the business.

Book Of Original Entry:

(B) PURCHASE JOURNAL

Transactions(s) recorded:

  • Purchases of goods on credit

 

Related Source Document(s)

·         Invoice (Original)

 

Book Of Original Entry:

(C) RETURNS OUTWARDS JOURNAL

Transactions Recorded:

  • Return of goods on credit

 

Source Document(s):

·         Credit note

 

Book Of Original Entry:

(D) SALES JOURNAL

Transaction Recorded:

·         Sales of goods on credit

 

Source Document(s):

·         Invoice, debit note

 

Book Of Original Entry:

(E) RETURNS INWARDS JOURNAL

Transaction Recorded

·         Return of goods by customer

Source Document(s):

·         Credit note

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