Cash transactions are first recorded in cash day books. Cash receipts are recorded at receipt side and cash payments are recorded at payment side.
At cash receipt side, commonly following transactions are recorded:
- Cash sales
- Purchase return
- Other income received in cash
At cash payment side, commonly following transactions are recorded:
- Cash purchases
- Sales return
- Selling and distribution expenses
- Administration expenses
- Finance cost
- Other expenses paid in cash
Receipt and Payments of recurring nature, such as sales and purchases are casted (totalled) on daily, weekly, monthly etc basis and posted (transferred) to general ledger (T accounts). However, receipts and payments, such as other income and admin expense, finance cost, other expenses are not casted and only posted on individual basis to general ledger.
Entity may choose to keep separate cash receipt and cash payment daybooks.
Cashbook can contain more columns depending on information needs for the business.
1 Cash Receipts
Day 1: Cash Sales for $50
Day 2: Cash Sales for $100
Day 2: Purchase return for $10
Record cash transaction in cash receipt book
|Cash Receipt Day Book|
|Day 1||Cash Sales||Ledger 1||50|
|Day 2||Cash Sales||Ledger 1||150||100|
|Day 2||Purchase Return||Ledger 4||10|
2 Cash Payment
Day 1: Cash Purchase for $50
Day 2: Cash Purchase for $100
Day 2: Sales return for $10
Record cash transaction in cash payment book.
|Cash Payment Day Book|
|Day 1||Cash Purchase||Ledger 2||50|
|Day 2||Cash Purchase||Ledger 2||150||100|
|Day 2||Sales Return||Ledger 3||10|