I am new to this, so hope this message works. I am currently studying for ICB1 and have a doubt in my mind about the Personal ledger account. This might sound really stupid, but I just need to get it straight in my head. Am I right in thinking that if someone is invoiced they are entered on the debtors account and the debtors account is credited when they pay and this debtors accounts is part of the personal ledger. But if they pay me cash/Cheque would I credit & debit the debtors account or should I be using another account. I have read so many different things on the internet that I am now having trouble sorting out truth from fiction.
I think you are pretty much on track... but in an attempt to make it clearer for you...
Invoiced
Invoice raised: Personal Ledger Account Dr 100.00 Revenue Cr 100.00
Payment made: Personal Ledger Account Cr 100.00 Bank/Cash on Hand Dr 100.00
Net result: Personal Ledger Account 0.00 (Dr & Cr clear each other) Revenue Cr 100.00 Bank Dr 100.00
Cash Sale Revenue Cr 100.00 Bank Dr 100.00
Unless it is a regular customer, or for some reason you want to track the customer's purchasing... if they are paying without an invoice raised (ie on delivery, POS etc) there is no need to raise an invoice, it is just more work for the same result.
