The cash receipts book

Question 1

What is the cash receipts book?

Answer 1

-where we record all money coming into the business bank account

Question 2

What will the cash receipts book include?

Answer 2

-receipts from credit customers
-receipts from cash customers
-mix of cheques, BACS etc.

Question 3

What if the cash book is treated as a book of prime entry only?

Answer 3

-post all totals to relevant general ledger accounts
-total cash and bank posted as Dr

Question 4

What if the cash book is treated as part of the double entry system?

Answer 4

-no need to post entries from cash and bank columns
-post all other totals to relevant general ledger accounts

Question 5

Do you record customer discount on receivables?

Answer 5

-no, just record the actual receipt total

Question 6

When is VAT recorded for?

Answer 6

-cash sales ONLY

Question 7

What are the double entries for the cash receipts book?

Answer 7

Dr cash
Dr bank
Cr VAT
Cr receivables
Cr sales
Cr sundry

Question 8

Where do we need to record, if a customer takes prompt payment discount?

Answer 8

-cash book receipts
-discounts allowed daybook

Question 9

What do you record in the discounts allowed daybook?

Answer 9

-difference in what they paid vs. what they would’ve paid if they didn’t take the discount = TOTAL including VAT
-work out VAT and net

Question 10

What does a statement of account show?

Answer 10

-all transactions for the period