Chapter Eight Flashcards
What is a two column cash book
Cash book containing bank and cash columns plus analysis columns including aVAT column
What is casting
Accounting term for adding up a colour of figures
What is cross cast
Adding up the totals of a number of columns to check they add back to the overall total
Do you include balance brought forward when cross casting
No, needs to not be included or deducted
What does a positive bank balance mean
The business has an asset at the bank.
Negative would be a liability
What cash balance be liability
No, only an asset or nil
What happens when the cash book has been totalled and written up
Totals must be posted to ledger account
What is the difference between between the cash book and other books of prime entry
Cash book can be a book of prime entry only or a book of prime entry and part of the general lesger
What happens if the cash book is a book of prime entry only?
The total of the cash and bank column are posted to the cash account and bank account in the general ledger (separate cash account and separate bank account)
