1. Ca h Book

2. What’s on the menu? Difference between the cash and bank account Advantages of the cash book 2-column Cash Book Contra Entries Posting entries in cash book to ledger accounts

3. Cash?? Bank?? What did you do with the money? How much ‘ang pow’ money did you receive from the last Chinese New year? How much are you left with? Now let us try to record the transactions in the cash and bank accounts on the board.

4. Cash?? Bank?? Cash Account –Involves money kept in the office –Usually small amount of money involved Bank Account –The rest of money NOT in cash account –Kept in current account of bank (not in fixed deposit account)

5. Cash Account and Bank Account How are they similar? –Both are assets An increase  Dr A decrease  Cr An in flow of cash = in crease of assets  debit An out flow of cash = de crease of assets  credit

6. Ca$h Book? What is a cash book? The cash book consists of both the cash and bank accounts. There is no need to maintain separate cash and bank accounts.

7. 2 – column Ca$h Book BankCashParticularsDateBankCashParticularsDate 2 – column Cash BookDr (IN)Cr (OUT)

8. 2 – column Ca$h Book $ParticularsDate$ParticularsDate Cash account CashParticularsDateCashParticularsDate Bank $ParticularsDate$ParticularsDate Bank account

9. Ca$h Book? Cash book as a book of original entry? –Information from source documents are recorded directly into the ca$h book What are the source documents? –Receipts –Cash till slips –Payment vouchers –Counterfoils of cheques

10. Source Documents Receipt Cash till slip Cheque Taken from page 114 – 115 of TB Counterfoil

11. Paying-in slip Source Documents Taken from page 114 – 115 of TB

12. Payment voucher Source Documents Taken from page 114 – 115 of TB

13. Advantages of a Ca$h Book Reduces the number of entries in the ledger –All ca$h entries are recorded in ca$h book. –So ledger does NOT include any ca$h entries at all –The number of accounts in the ledger is reduced Higher efficiency –One person can take charge of the ca$h book Easier reference to the Cash and Bank account –Both accounts are found in the Ca$h book –All money received and paid on a particular date are recorded on the same page instead of on different pages in the ledger.

14. 2 – column Ca$h Book Therefore, the cash book is like a journal and ledger. Why? Journal - information from the source document is recorded directly into it Ledger – the cash and bank accounts are not found in the ledger books at all

15. Exercise 1 Now, let’s try to record some entries into OUR ca$h book On April 2, you received –A birthday gift $500 in the form of cheque from Mum and Dad –A birthday gift $100 cash from Aunty Mary –A birthday gift $40 cash from Cousin Lily

16. Exercise 1 On April 2, you paid –$200 in cheque for expenses incurred for holding birthday party at Hard Rock Café –Cash $10 for food bought for grandma who was unable to attend your party –Donate a $40 cheque to National Kidney Foundation (NKF) as a good deed.

17. NKF 40 Birthday Gift – Cousin Lily 40 Grandma’s food 10 Birthday Gift – Aunty Mary 100 Party 200Apr 2Birthday Gift - Parents 500 Apr 2 $$$$ BankCashParticularsDateBankCashParticularsDate Two-column Cash Book Dr (IN) Cr (OUT) 2002

18. Contra Entry What is a contra entry? –To record the following transactions When money from the bank is taken out for office use When money from the office is put into the bank

19. 2002 May 2$100 is withdrawn from the bank for office use May 25$250 from the office is paid into the bank $ $$$ BankCash ParticularsDateBank Cash ParticularsDate Dr (IN)Cr (OUT)Two- column Cash Book 2002 May 2 Bank 100 2002 May 2 Cash 100 25 Cash 250 25 Bank 250

20. Now, let’s try a question Pair with the partner next to you Post the entries on worksheet 1

21. Posting to ledgers BankCashParticularsDateBankCashParticularsDate 2 – column Cash BookDr (IN)Cr (OUT) 2002 $ $ Jan 1 Balance b/d 100 850 Jan 7 Purchases 50 5 Ken 150 20 Stationery 35 18 Sales 120

22. Posting to ledgers Date $ParticularsDate $Particulars Ken 2002 Jan 5 Bank 150 Date$ ParticularsDate $ Particulars Purchases 2002 Jan 7 Cash 50

23. Posting to ledgers Date $ParticularsDate $ Particulars Sales 2002 Jan 18 Cash 120 Date$ ParticularsDate $ Particulars Stationery 2002 Jan 20 Cash 35

24. Posting to ledgers Based on the cash book prepared for worksheet 1, do the posting to the appropriate ledgers.

25. So, what have I learnt? Difference between the cash and bank account Advantages of the cash book 2-column Cash Book Contra Entries Posting to ledgers