Bookkeeping questions
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1) Is return inwards or outwards included in the 3 column cashbook?
2) A credit balance in a bank statement. Is not neccessary a minus (bracket) isn't it?
3) If say, a transaction is not stated as being in cash or cheque, like for e.g I bought goods for $120.
Can I assume it's cash and place it under the 'cash' column of the 3 column cash book?
Thanks.
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Come on, answer pls?
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Bump.
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Hi!
1) Return inwards/outwards can only be included in the 3 column cashbook if only the item states that cash was paid/return upfront.
2) In your CashBook, debit balance means you have the amount of money (classified as asset). In the Bank's point of view, it will reflect a credit balance. You need not place a bracket () to reflect the word 'credit'.
Vice versa, if you have an overdraft (credit balance) in your cash book bank column, that will reflect as a debit balance in the bank statement. However, you are required to put a bracket should you see debit balance in bank statement.
3) Usually in the Cashbook questions, every entry is specific to its nature of transaction (i.e. cash/bank payment). Rarely will you see such entry (examply by you) without stating paymode mode.
If additional information were given in the questions i.e. "all purchases were in cash", then you can assume that "bought goods for $120" is paid by cash, and record it under the cash column.
Furthur more, you can also to various types of dish chq question. If the creditor paid you on time, you gave a discount BUT the bank found the chq dishourned. How would you record the discount (to not to discount him)?
Perhaps we can discuss over this when you reply again?Regards,
Chin Seng. -
Thanks for the replies!!!!
No, there's no instructions given when they say "Bought goods frm LL Trading at $1000 less 5% trade discount and 10% cash discount if paid within 7 days"
I checked the rest of the questions, there's no dishonoured cheque or anything related to this question, however there is one dishonoured cheque for the other question, so I could safely assume it's paid by cheque.
And there's also the 'proprietor took 2 boxes of goods worth $160 each for use at his house.' without stating anything.
And to regards to the answer no. 1 , Question states "Mimi returned 11 units of equipment purchased on Mar 4" and "A credit note of 165 was receieved from KK Trading for the return of 2 boxes of goods".
I assume both need not be recorded in the cash book?
How do I enter those transactions in a 3 column cash book?
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Btw it had bank overdraft and cash for balances at the first day of the month.
Anyways, the question asks for books of prime entry, which means they also included 3 column cash book and the Journals.
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Bought goods frm LL Trading at $1000 less 5% trade discount and 10% cash discount if paid within 7 days
Theory that you should know.
Trade discount ---->> is given when you buy goods at Bulk (large amount).
Cash discount --->> is given to encourage buyers to pay on time or promptly.To record this entry, you will need to find an entry which is seven days later. :) That's the gist of this question. If you found an entry saying that you have paid LL trading after 7 days, you're entitled for the additional discounts.
If you haven't paid within the seven days, then you're not entitled to the 10% cash discount. But, you will still get the 5% trade discount.
You will need to refer to the dates 7 days after this entry.
Proprietor took 2 boxes of goods worth $160 each for use at his house
This is classified as drawings. Since the goods is for the company use, it would be there will be 'lesser' goods to sell after the owner took out goods.
Drawings a/c increase, Purchase a/c decrease. In your Trial Balance/Trading account, you'll Minus the purchase figure, and Add the Drawings.
It will look like:
Opening stock
Add Purchases
Less Drawings
COGAFSThis entry is not required to be recorded in cash book. HOwever, if the owner withdrew cash for own use, then you'll need to record in cashbook.
In accounting, when someone purchases goods or equipment, it is usually known as credit sales (from our point of view) or credit purchases (from their point of view). It would not be wise to bring a hugh sum of money to purchase those equipments. They will pay for the equipment at a later date. Thus those who purchase your equipment (but pay later) are known as debtors. i.e. they are still in debt (owe you money). Thus classified as an asset in Balance Sheet.
=D In credit purchases/sales, no actually cash is involved upfront.
Mimi returned 11 units of equipment purchased on Mar 4
Because you didn't state who is the propriator of this company, I can't tell you how to do the exact debiting and crediting.
To record this entry, you will have to know which a/cs are involved. Mimi a/c and Equipment a/c.
Case No.1 --->> If Mimi is the owner of this business, returning the equipment would means equipment a/c will need to Minus. And after returning the equipment, the creditor a/c will also go down. Because you doesn't owe as much money anymore.
Case No. 2 ---->> If Mimi is the person who bought your equipment, then, your equipment a/c will increase due to the returned equipments. Mini who is your debtor will go down because she doesn't owe you as much too, returned equipment already.
A credit note of 165 was receieved from KK Trading for the return of 2 boxes of goods
Theory: What is a credit note? Who gives? Who receives?
Recall. Credit is given by creditors when you return the goods that you've purchased.
KK Trading is your creditor (the one you owe them money). Because this is a credit sale/purchase nature, you do not need to record this entry in Cash Book.
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Hi, thanks for the answers. But because like I've said in my previous post.
I would like to know how do I enter these entries into the book of prime entry (there's no trading a/c)
And also, you have not answered where should I put those...like in the cash or bank column. I understand there are some entries that need not be place in the columns. But how about the ones that did not mention any cash/cheque?
Perhaps you could give me an answer like :
Description.
Discount allowed/receieved
cash
bank
And also one more question, Proprietor injected fresh funds into business through $3,000 cash a personal cheque of $10,000. Is this a contra entry?
And..And also, is it possible if such questions are mostly considilate into the journals instead of a cash book? Since they did not mention any cash or cheque.
The questions above I gave you is asking me to record them in the book of prime entry. They mentioned they want 3 column cash book, general journal, sales,purchases returns journal. Is it possible that a 3 column cash book might not contain that much information? Perhaps only 2 or 3 entries in them?
Very thank you once again for your very detailed replies :D Thank you thank you very much!!!
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Would like to knwo more updates on this :)
Thanks :)