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Help needed!

luckyzluckyz Registered Posts: 8
in General AAT student discussion
I am studying Processing bookkeping transactions at the moment and there is one thing I can't get my head around:
http://forums.aat.org.uk/discussion/440781/posting-petty-cash-to-general-ledgers#latest
Does anyone know how to answer my question please?

Comments

  • AGI2015AGI2015 Registered Posts: 45
    Do you have any task for this?
  • luckyzluckyz Registered Posts: 8
    I don't have specific task as such. I am just not sure where I go wrong with my thinking.

    Giving an example:
    Cheque is written to Petty Cash. We record this operation on the credit side of the Cash Book under Bank column and Petty Cash column. Once we post it to general ledger accounts, it will be credit to Bank Ledger and debit to Pettty Cash Ledger.
    And now considering the debit side of Petty Cash Book - the same operation will appear here - receipt money from bank. If we post it to general ledger we will need to debit Petit Cash Ledger and credit Bank Ledger.
    I don't think it's correct to post the same thing twice, so what is the proper way to address this problem?

    Is there anyone able to explain it?
  • AGI2015AGI2015 Registered Posts: 45
    When you pay money out is Credit side in Cash book and Bank account, but when your receive money or pay into your account is Debit - that means this is an asset for you.I don't think you have to post these transactions twice, unless you require to do this.
  • luckyzluckyz Registered Posts: 8
    I believe it would be wrong to post these transactions twice. How do i aproach the problem of posting from books of prime entry to the ledgers then?
    For example:
    I post everything from credit side of Cash Book including posting credit to Bank Ledger and debit to Petty Cash Ledger, exactly the same as I would debit cash purchases or trade payables for example and later ignore debit side of Petty Cash Book and will not post anything from there.
    Or
    From credit side of Cash Book I post only credit to Bank and debit to cash purchases or trade payables etc, but completely ignore posting total of column of Petty Cash to the Ledger and from debit side of Petty Cash Book I will post debit to Petty Cash Ledger only and ignore crediting Bank Ledger as it was done from Cash Book.

    Is there any clear rule how to do it the proper way. Or is there something I am missing in my way of thinking?
  • AGI2015AGI2015 Registered Posts: 45
    This is helpful, regarding the same problem
    http://forums.aat.org.uk/discussion/34440/cashbook-to-general-ledger
  • luckyzluckyz Registered Posts: 8
    Hi again. I looked at your link and I know how to answer their problem, which I actually did, but still not the clue about mine.
    Thank you for trying AGI2015.
  • stevefstevef Well-Known CarmarthenRegistered Posts: 258
    I think your over thinking a basically simple transaction. If you using your cash book as a form of journal to be used for posting transactions into the general ledger periodically, its simply: credit bank, debit petty cash, no other entries are required.

    When you spend the petty cash you: debit nominal account, credit petty cash (unless using the imprest system).
  • luckyzluckyz Registered Posts: 8
    Hi Steve!
    Thank you for your reply. I would record all the transactions the way you did it and not post anything from debit side of Petty Cash Book as it was done originally from credit side of Cash Book (credit Bank, debit Petty Cash).
    I used BPP book to learn. I don't know why they explained I should post debit side of Petty Cash Book to general ledger, because for me it didn't make any sense.
    I study at home, so didn't have anyone to ask...
    I already passed Processing bookkeeping transactions with excellent result so moving to the next one.
  • Jubilee98Jubilee98 Registered Posts: 1
    Hi
    I am studying bookkeping transactions, does anyone know a good podcast to listen too as an extra learning tool instead of sitting by computer and reading books
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