Maintaining the cash book Flashcards
What is the two-column cash book?
-An analysed cash book containing cash and bank columns, plus analysis columns, including a VAT column.
What are the documents used to update the cash book?
-Primary records
-Cheque
-Direct debit
-Standing order
What are the primary records?
-Receipts, invoices, remittances and other documents which are retained and used to update the cash book on a regular basis.
What is a cheque?
-A customer’s written order to their bank to pay a specified sum to a particular bank account.
What is direct debit?
-A method of making payments direct from the bank where payments are for variable amounts and/or varying time intervals.
What is a standing order?
-Method of making regular payments directly from the bank account of the customer to the bank account of the supplier.
What is casting?
-An accounting term for adding up a column of figures.
What is cross-cast?
-Adding up the totals of a number of columns to check that they add back to the overall total.
What is an overdraft?
-A negative balance in the business’s bank account, similar to a short-term loan as the business owes the bank that money; however, the bank can request payment of that money at any time.
