I need explanatioN!!! - The Book-keepers Forum (UK)

Magda · Member

I need explanatioN!!!

kjmcculloch · Guru

I'm confused too.

Kris

Magda · Member

kris,
"paid telephone bill 90pound in cash".Bank Account or Cash Account?

Alfred · Senior Member

Hi Magda

if you paid the phone bill by cash you should record this in the cash account

Magda · Member

Alfred wrote:

Hi Magda

if you paid the phone bill by cash you should record this in the cash account

can you help me with examples above?

ADAS · Guru

Magda.

The double entries would be:

1. draw chq for £1,200 - dr cash a/c
                                    cr bank

2. pay expenses - dr expense a/c e.g telephone - £90
                              cr cash a/c

3. pay £600 cash back into bank - dr bank
                                                   cr cash.

-- Edited by ADAS on Monday 20th of September 2010 11:09:48 PM

Magda · Member

but all transactions would be in Cash accaunt?is it?But I still don't understant because we have a cheque for 1,200 so why they want record it in Cash Account?if there will be just "drew 1,200 cheque for cash"without Cash acc suggestion where I shuld record it?

PhilMcTankup · Senior Member

Don't be offended Magda, but have you had any bookkeeping training? If ADAS's reply leaves you confused I think you would benefit from some. Have a look at posts on this site within last month and you'll see plenty of recommendations on text books etc.

All the best

Merlion ABS · Senior Member

Try this,

CR Bank £1200 Cash out of bank and into cash
DR Cash a/c £1200

DR Phone £90 either in Profit & Loss or as a supplier payment if you loaded the bill on
CR Cash £90

CR Cash £555 half remaining cash back into bank
DR Bank £555

This will show the cash going out the bank and into the Cash account.
Then The £90 Cash out of cash a/c to pay the bill
Then half the remaining cash coming out of cash account and back into the bank.

This then leaves £550 remaining in the cash account.

Hope that's clearer.

attilabenko · Guru

Hi,

I thought I got it but why would you draw a cheque(?!) from your own bank a/c to get cash. Surely you would just get the cash.
Anyway when you take money from your bank a/c it is assumed it is for business use (cash a/c) otherwise it would say drawings or any other purpose...so double entry must be your bank a/c and your cash a/c

Alfred · Senior Member

Hi Attila

The Company may have requested not to have received a card for the business account a similar situation at my place of work, so the only way to get cash out of the account would be to write a cheque to cash.

Madga

If you dont understand the double entry being give why dont you ask the question again please so that we are all clear as to what you need exactly as we may not be understaning what you need doing.

Magda · Member

Thank you,I just start with bookkeeping. aww

I was thinking the same like you but I wasn't sure is it possible.

Attila,
I was confiused because whay someone draw a cheque from your own bank a/c to get cash and then recorded them in to Cash A/c confuse

I thought that I think in wrog way.
Thank you for your answers any way.

attilabenko · Guru

Hi Alfred,

Thanks for the info, never came across this but I see the point now.

Hi Magda,

You have to think about the principles of double entry! Before you would take any further steps/studies in bookkeeping you must understand the basics.
Ok it is your own money,your own bank a/c and cash a/c but you move money from one place to the other so you would have to make entries in both accounts. You took money from your bank a/c so you have to make an entry here about where the money went and you put money in your cash a/c so you must make an entry there,too about where the money came from.

Magda · Member

I've done some assignment would like to check this?I haven't done double entry for Cash A/c yet.But if you don't mind,please let me know what do you think about this.

-- Edited by Magda on Tuesday 21st of September 2010 04:40:13 PM

attilabenko · Guru

Yes. Looks ok apart from minor things.
Check your spelling (data-date,etc), do double-entry for entries in cash a/c, when you post something to cash a/c don't write cash in the details but write what it is (like bank), if you give folio numbers you should number the accounts accordingly otherwise they are meaningless.

Hope this helps.

There should be a student/study forum similar to this where students would be able to help eachother.

PhilMcTankup · Senior Member

Ok Magda, have a look at this example question and solution I found on the web:

http://www.accountingformanagement.com/single_column_cash_book.htm

It is a similar scenario to what you are dealing with, won't answer all your questions, but will give you some confidence I hope. This particular example is on an American website but is ok at this level.

There is a lot of stuff like this on the web, have a look for it and you'll be surprised what is instantly available to you free of charge. I do it all the time

Re your assignment, you're almost there. There should be only one cash account though.

attilabenko · Guru

Yes you probably left in the cash a/c in the middle by mistake! Didn't even notice...

Magda · Member

-- Edited by Magda on Tuesday 21st of September 2010 07:12:57 PM