CASH BOOK RECEIPTS AND DOUBLE ENTRY

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi,

I'm really confused. Can anyone help me with what the double entries on the general ledger should be for entries in the cash book? We've done the Sales Day Book and that seems straight forward, crediting sales (minus VAT) and VAT and debiting Sales Ledger Control. I can't seem to get my head around entries for the cash book. If you have a cheque for payment of an invoice and then also a cash sale in your cash book, are these treated differently for double entry purposes? I'd appreciate any help anyone can give!! Thanks

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:CASH BOOK RECEIPTS AND DOUBLE ENTRY

    Hi there!

    The cash sale double entry is:

    DR Cash (gross)
    CR Sales (net)
    CR VAT

    You would only treat a cheque differently if it was received to pay a debtor invoice i.e. a credit sale, but if it was received straight away i.e. a cash sale then this is treated the same as cash.

    Hope that helps!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:CASH BOOK RECEIPTS AND DOUBLE ENTRY

    Thanks. I'm just getting really confused as we're doing a simulation at college and need to make the double entries from the cash book receipts. What you are saying makes sense and sounds easy, but we have been given a list of general ledger accounts and there is no cash account. The accounts we have been given in the general ledger are for sales, sales returns, Sales Ledger Control, VAT, Discount Allowed and cash book receipts. I presume I credit sales with the net amount and then credit the VAT amount to VAT, but where would you think the other side of the entry should be? I've been doing fine until now and am getting near to giving up on the whole thing!!! Thanks for your help.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:CASH BOOK RECEIPTS AND DOUBLE ENTRY

    Hi!

    Don't worry - you're not the only one, bookkeeping and double entry is pretty hard to get your head around to start with! I'm about to take my intermediate exams, but when I was studying foundation and first looked at double entry I never thought I would understand it! You will get there though, I promise - don't give up!

    It would usually be Cash or Bank, but in this case cash book receipts sounds right as the money is a receipt in the cash book.



  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:CASH BOOK RECEIPTS AND DOUBLE ENTRY

    .


  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:CASH BOOK RECEIPTS AND DOUBLE ENTRY

    Don't give up, when you're a year down the line like me, you'll wonder why it seemed so difficult

    I think what's causing you problems is that, unlike the day books, the cash book is itself part of the double entry system - you don't need a T account in the main ledger as the CB performs this function

    The main ledger entries for receipts from credit customers will be

    Cr SLC (Use the total of credit customer gross receipts from the Cash Book)
    Dr Cash Book (ie the entry alrady in the receipts side of the CB)

    You don't need to worry about VAT with receipts from credit customers as you dealt with this when posting from the day books.

    For cash customers, it's just like PP22 said only you don't need to debit a main ledger 'Bank' account cos you've got the CB for this. So it's

    Cr VAT
    Cr Sales (net of VAT)
    Dr Cash Book (ie the entry in the receipts side)

    Hope this helps

    Chris
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:CASH BOOK RECEIPTS AND DOUBLE ENTRY

    Thanks for this, I think i might finally be seeing the light at the end of the tunnel now!!!

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