I down loaded some samle test questions fron the net and one of the questions has me stumped:
In the cash book a sole trader has made sales of £450 he puts fifty pounds in his petty cash float and banks the rest, how would this be recorded.
Also the cash book has been balanced at the end of every month, are these balances just carried down and month after month till you end up with a final balance at year end.
I'm not quite sure of the second question. But generally a cashbook helps you to see how much monies the business received and how it was expended. It is balanced at month's end. It is used to reconcile bank statement.
I assume by cash book you mean a manual cash book. So you want to know what to write in the columns as opposed to the debits and credits of the double entry.
Everyone has a different meaning at to what "cash book" contains. Some people include their cash in their cash book whereas other keep cash separate in a petty cash book and the only cash book transactions are items throught the bank.
If the first example you would mark up £400 in the banked column.
If the second example you would mark up £400 in the banked column and £50 in the cash column.
