cashbooks help please

babiekelbabiekel Feels At HomeRegistered Posts: 26
I am looking over Chapter 5 in the training book (premier traiing) and am a little confused.
The cashbook is classed as on the debit side -> which then makes the sales ledgers go on the opposite side (Credit)-> So the main ledgers ie sales acct & VAT acct should be on the debit side? but in the book they are on credit side and i can't understand why?

Can anyone explain it a little please?

Many Thanks :) xx

Comments

  • SashaDellaSashaDella Trusted Regular Registered Posts: 362
    The cashbook acts like the bank, so the debits and credits are on the opposite side

    remember money in the bank/ cashbook = debit
    money out bank/cashbook = credit

    and then you enter the opposite db/cr to complete the double entry.

    Hope this helps!
  • babiekelbabiekel Feels At Home Registered Posts: 26
    Thanks Sashadella,

    I understand the whole money in (debit) and money out (credit) but it still doesn't make sense to me.
    So..
    Cashbooks -receipts - Debit
    Sales Ledgers - credit
    which should make the main ledger Debit but in the book it has them on the credit side but it just doesn't make sense why. I thought it should be on the debit side.

    Sorry if that doesn't make sense, i just can't get my head around why it would go on that side?
    Thanks for your time x
  • SashaDellaSashaDella Trusted Regular Registered Posts: 362
    So its a customer receipt, the customer is paying off an invoice
    the money is coming in (db cashbook)
    credit sales ledger.

    When you put on the invoice:
    Cr Sales
    Cr VAT
    Db SCLA

    When you put on the receipt:
    Cr SCLA
    Db Bank

    Is that clear? I know it can get confusing!
  • babiekelbabiekel Feels At Home Registered Posts: 26
    Its kind of making sense but not totally. If you are credit the sales ledger then why do you then have to credit the sales and VAT - Should they not be debits because they should be on the other side of the t acct?

    Sorry if i'm sounding really dumb, one minute i think i understand it and then the next, it's totally gone!
  • SashaDellaSashaDella Trusted Regular Registered Posts: 362
    When a receipt is recieved you do not post to sales or vat.

    You only need to clear the money they owe from the SCLA.
Sign In or Register to comment.