Wednesday, February 3, 2010

(96)-TWO COLUMN CASH BOOK FOR SINGLE ENTRY

Preparing Two Column Cash Book for Single Entry

Where there appears to be a sizable volume of receipts and payments in cash, then it is also helpful to construct a two column cash book.

A two column cash book is a cash book with one column for cash, and one column for the business bank account.

A two column cash book is completed as follows in single entry accounting.
  1. Step one. Enter the opening cash balances.
  2. Step two. Enter the information given about cash payments and any cash receipts.
  3. Step three. The cash receipts banked are a “contra” entry, being both debit bank column and credit cash in hand column in the same account.
  4. Step four. Enter the closing cash in hand (cash in the bank at the end of the period is not known)
  5. Step five. The closing balance of money in the bank is a balancing figure. Notice that this is a credit balance i.e. an overdraft.
  6. Step six. Since all sales are for cash, a balancing figure that can be entered in the cash book is sales, in the cash in hand debit column.


Theft of cash form the till


When cash is stolen from the till, the amount stolen will be a credit entry in the cash book, and a debit in either the profit and loss account or insurance claim account, depending on whether the business is insured. The missing figure for cash sales, if this has to be calculated, must not ignore cash received but later stolen.

No comments:

Post a Comment