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Cash book question

Hi all,

I've started dealing with cash book recently so it is something completely new to me.

In my company cash book we have a column for general ledger , bank charges , AP , AP D/D and AR receipt.

I believe to have a general understanding of where to allocate amounts falling under the last four column however I am not that sure when it comes to entries that should go under the G/L column...

Do I need to journalize only entries in the GL column ?

Finally , If for example someone pay us twice the same invoice by mistake and we need to refund them where would I book the refund in the cash book? Would it be a positive amount in AP?

Thanks

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I'm not sure where you are working, but it sounds like you're doing manual books (wow haven't really seen paper books in many a year).

Not sure exactly what is D/D (it's early), but if you are using paper journals, you should use a 12 or 16 column journal. Always use the same column for the same account. the last column is G/L which is used for very seldom used accounts.

If you get a duplicate payment, you would debit Cash and Credit A/R (unapplied). You could if you wish credit "Deposits", or "Suspense". When you write your check, it is a credit to Cash and a debit to where ever you originally put the debit.

My suggestion is to use a real computerized accounting system and save yourself hours of footing and summarizing multiple journal pages. Xero is an excellent product and many like QuickBooks.

Good luck

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

Think of the Cash Book as your Cash Ledger. Anything that touches cash is recorded.,,,via or contra your columns. The GL column are for GL accounts not in your other columns. Ex. if you paid for prepaid insurance....Prepaid Asset or you paid for machinery.,,,Machine and Equipment.

As for the duplicate payment, I disagree with Wayne, well, the right phrase would be, I have a different preference. I do not like contra entries unless it is through a "normal" transaction. If this is the only case, this will result in a CREDIT BALANCED A/R (which is really an A/P or liability) .If it is a double payment, then it should be A/P or maybe something like Funds held in Trust. The only caveat to this thinking is if there is a master customer file that reports all customer transactions.

I second Wayne's last suggestion re: accounting system.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Emerson,

Accounting is interesting; there are many times many ways to get the same result. Consistency and auditability are the key aspects.

I third your second :) oh, can't do that under Roberts...

paul aisam
Title: Accountant.
Company: technologies
LinkedIn Profile
(Accountant., technologies) |

HI Emerson, thanks for your reply. What you said makes sense however on the other hand it doesn't really tell me why salary and tax payments, which both affect cash are recorded in GL whereas payment of invoices, expenses or receipt of payments, which affect cash too, go either in AP or AR.

For example, if I were to receive a one off invoice which I'd rather journalize rather than set up into my system. Where would I book that journal? would it be a cash book journal? considering I will be including the payment in there I would assume that is the correct way but I may be wrong.

Hi Wayne,I have got Oracle and D/D stands for direct debit payment.

Thanks

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

Because if you are going to create a column for every type, you will have a looooong worksheet. The columns/types you mentioned are the major/usual transactions.

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