Maintaining the Cash Book

• Post transactions to the three column cash book

• Balance a three column cash book

• Identify the uses of primary records

• Post from the three column cash book to the main ledger

Slide 1

Three column Cash book

• records all money received by the business both cash and bank

• It does go a stage further and analyse why the cash was received

• Receipts are entered into the debit side of the cash book (money in)

• Payments are entered on the credit side of the cash book (money out)

• Discount allowed and received are recorded in the memorandum columns

Slide 2

3 column Cash book Debit SideDate Details Discount

allowed

Bank Cash Sales SLCA Insurance VAT

July

22nd Cash sales

587.50 500.00 87.50

Tigger Ltd 5.00 225.30 225.30

Insurance 500.00 500.00

23rd Cash sales 822.50 700.00 122.50

24th Cash sales 1116.25 950.00 166.25

25th Cash sales 307.85 262.00 45.85

Cats Ltd 2.50 103.25 103.25

26th Cash sales 587.50 500.00 87.50

TOTALS 7.50 828.55 3421.60 2912.00 328.55 500.00 509.60Slide 3

Main Ledger

Slide 4

Debit Sales Credit

£22nd July bal b/d 488.4026th July Bank 2912.00

Sales ledger Control

Debit Credit

£26th July bank 328.55 discount allowed 7.50

MAIN LEDGER

£

22nd July bal b/d 538.63

Debit Insurance Credit

£ £

26th July bank 500.00

Slide 5

Debit vat Credit

£22nd July bal b/d 509.60

Discount allowed

Debit Credit

£

MAIN LEDGER

£

£

26th July cash book 7.50

Debit Tigger Ltd Credit

£22nd July bal b/d 230.30

£22nd July bank 225.30 discount allowed 5.00

SALES LEDGER

Slide 6

Debit CreditCats Ltd

£

22nd July bal b/d 105.75

£26nd July bank 103.25 Discount allowed 2.50

Activity

• Complete activity Test 1

• Record the receipts into the cash book

• Total the cash book and check it cross casts

• What would be the double entry for the discount allowed column?

Slide 7

3 column cash book (CREDIT SIDE)

Slide 8

Date Details Discount

received

Bank Cash Purchases

PLCA Wages VAT

July

22nd

Cash Purchases

360.00 300.00 60.00

Desmond Ltd 15.00 150.00 150.00

Bank Wages 400.00 400.00

23rd Cash purchases

600.00 500.00 100.00

24th Cash purchases

540.00 450.00 90.00

25th Cash purchases

300.00 250.00 50.00

Elmson Ltd 5.00 100.00 100.00

TOTALS 20.00 650.00 1800.00 1500.00 250.00 400.00 300.00

Activity

• What would be the entries in the main and purchases ledger?

• Using the debit and credit columns and assuming that the opening balances were

• Cash £100

• Bank £2500

• What would be the balances in each of these accounts?

Slide 9

Primary Records for the cash book

• Research task

• In Pairs find out what the following primary records are and prepare a handout to be shared with the rest of the group.

• Use Pictures and examples to enhance your work

• Till Receipts

• Paying in Slip

• Cheque and cheque stub

• Automated transfer

• Bank Giro Credit

• Bacs

• Chaps

• Standing Order Schedule

• Direct Debit

• Bank Statement

Slide 10