Posting from Cashbook to ledgers

Hi everyone,

I really struggle with deciding which ledgers to post entries to and the amounts to post, especially from the cashbook. Level 2 book keeping processing exam usually gives entries to the cashbook (DR or CR side) and then asks you to post the entries to the relevant ledgers from a picklist - this is the part that i find confusing! Especially when it lists individual customer transactions (DR receipts side). Also when the cashbook is or isnt part of the double entry, can never figure this out!
Any help or tips o figure this out would be really appreciated :)

Comments

  • amy256amy256 Registered Posts: 32
    Hi there,

    As far as I understand, whatever side the transaction is recorded on in the cash book, you do the opposite entry in the relevant account in the general ledger.

    For example, if you had in the Debit side (receipts) of your cashbook: Cash sales £100.00 + £20.00 VAT (Gross total £120.00), you would then pick the relevant accounts from the ledger: Sales and VAT. You would then credit your Sales Account by £100.00 and credit VAT Account by £20.00. This provides the double-entry side to the cashbook as you have your Debit amounts in the cashbook & the Credit amounts needed in your ledger accounts.

    I also use the term 'DEAD CLIC' to help me remember what needs to go where.
    This means:
    D = Debit
    E = Expenses
    A = Assets
    D= Drawings

    C= Credit

    L = Liability
    I = Income (usually sales)
    C = Capital

    So for example if you were told that a business spent £24.00 on stamps (no VAT) you would first decide what it is from the above list. It is an expense, so you would DEBIT the Postage & Stationery Account by £24.00 and would likely see the opposite side of the entry as a credit (payments side) in the Petty Cash Book of the business.

    Hope this helps a little!

    If you need help with individual customer transactions still I can try explain. Just hope this made sense! :)



    AAT Level 3 :)
    StuartWconnahh97
  • Breeze1Breeze1 Registered Posts: 2
    Thank you on the above, both have helped a bit and think I'm getting my head around it a bit more :)
    StuartWamy256
  • amy256amy256 Registered Posts: 32
    How are you finding it now? :)
    AAT Level 3 :)
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