Trade receivables?

Hi everyone, could someone help me with making entries in the cash book please?. There is a customer reciept of a cheque for £1000 and cash received of £326. I get that the cash goes in the cash column, but the answer for the cheque went straight to the bank column. I am confused about what goes in the trade recievables column. A remittance advice from another customer says £474 will be transferred to your bank account today, this entry went in the trade receivables column. Would the cheque for £1000 not go in the trade recievable column? I am new to accounting and don't understand much yet. Thanks

Answers

  • Pian32
    Pian32 MAAT Posts: 448
    The trade receivables is for money paid from someone who owes money. The cash and bank column is for sales and payments made then.

    In this case the reciept itself is for an instant payment. The cash in hand and the cheque to go into the bank. The remittance advice is for a previous transaction that is now being paid and is therefore not a new sale and goes against the trade debtors.

    The cheque although not being processed by the bank has been paid by the customer immediatley. If the cheque was for the remittance advice however it would go in the trade receivables
    AAT Level 4, MAAT
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  • moltisanti98
    moltisanti98 Registered Posts: 7
    Thank you I think I understand now great information. So because the cheque was on a receipt and not a remittance advice it is not a trade receivable?
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