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Cash book

Please help
Just started Level 2 and...oh la la..get confused with a lot.
Please advise
When entering a cheque book with a supplier that we have no credit account, 480 including VAT
Do I need to specify in the VAT column as well? Or just payables 480 and bank 480?
Thank you


  • SACKERSSACKERS Just Joined Registered, Tutor Posts: 11
    You are describing a cash transaction, cash transactions are paid immediately (no credit given).
    This is a cash purchase. The entries in the credit side of a two column analysed cash book would be, assuming supplier name Smith Date 31 Oct purchase £480 incl VAT:

    Date Details Cash Bank VAT NET Cash Sales
    31 Oct Smith - 480 80 400 400

  • WaqasWaqas Registered Posts: 2
    Hi Guys
    I'm near to finish my first module of Bookkeeping Transactions AAT L.2
    Since I've started Cash Book, everything in my world has gone upside down :(
    In transferring the entries from Sales Day book to General Ledger, I was debiting the SLCA, crediting the Sales Account and debiting the subsidiary accounts.
    then from Purchases Day book to general ledger, I was crediting PLCA, debiting Purchase account and crediting the subsidiary accounts.
    Now, in CASH BOOK, I am supposed to Credit Sales account, SLCA and customers' subsidiary accounts because sales is in Debit side of the cash book
    I am supposed to debit Purchases account, PLCA and suppliers' subsidiary accounts.

    Can anyone please help me understand these transfers?
  • AminoAlexAminoAlex Registered, Tutor Posts: 17
    Hi Waqas,

    That's because the balance of those accounts (SLCA & PLCA) have reduced as ultimately, they have gone in or out of the cash book.

    For example, the SLCA (asset decrease) has reduced = a credit entry. This is because you have received money from customers and this has gone to your bank (asset increase) = debit.

    The same applies with the PLCA - we don't owe as much so we debit PLCA, because we have reduced our liability, so we credit bank account and debit the PLCA (reduction in the liability)

    As you mentioned, the sales ledger accounts - when the customer has paid us, we credit there account and normally write the entry "bank" to show that the customer has paid us.
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