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Articles by Nagasravan Tamma
Page 19 of 27
Differentiate between cash transaction and credit transaction
During the course operations, every business will have several transactions, which have an impact on business finances and are recorded in books.Cash transactionsCash transactions are those transactions, which are settled at the time of occurrence of transaction. Sometimes, they are settled in cash at the time of occurrence or sometimes they are paid with debit card, credit card, through bank transfer or cheque payment at the time of occurrence.In simple words, a business transaction is said to be a cash transaction, when it is settled immediately at time of occurrence. These transactions show an immediate effect on business cash flows. ...
Read MoreDifferentiate between event and transaction
Let us understand what is an event and a transaction, before learning about their differences.TransactionsIt involves exchange of goods/services for value between more than one party, firm or accounts and is called financial transactions. A transaction has monetary impact on the financial statements. Transactions are recorded in books of accounts.A transaction which is related to purchasing of goods or selling of goods, payments to creditors etc. are called business transactions. Types of accounting transactions are cash transactions and credit transactions.EventEvent is nothing but the final outcome of business activity, which affects the account balances of a company. If there is ...
Read MoreHow journal entries for the imprest petty cash system are recorded?
The journal entries for imprest petty cash system are recorded as follows −Fund establishment − (Imprest petty cash fund = 150)AccountDebitCreditPetty cash150Cash150Total150150Payments− (Postage payment = 35, stationery payment = 50)AccountStartEndCash held15065Postage payment35Stationery payment50Total150150Fund replenished − (Postage payment = 35, stationery payment = 50)AccountDebitCreditcash85Postage payment35Stationery payment50Total8585Errors − (Postage payment = 25, stationery payment = 50, error = 10)AccountDebitCreditcash85Postage payment25Stationery payment50Sundry expenses10Total8585Increase in petty cash − (Increased petty cash = 50)AccountDebitCreditPetty cash50Cash50Total5050
Read MoreExplain the imprest system petty cash
In this imprest cash system, the balance of petty cash funds always remains fixed or constant. The amount to be fixed is decided at the start or first time at a fund established. During the period, the petty cashier pays the expenses and maintains vouchers for that.At the end, the cashier submits the vouchers to the chief cashier along with vouchers. After reconciliation, cash spent on expenses is reimbursed and maintains the imprest cash fund to the initial fixed amount. Float is the term used for a granted amount.At any time, cash held plus petty cash vouchers should be equal ...
Read MorePrepare a ledger balance by using columnar petty cash books
Refer the data given below to prepare a ledger balance − Analysis columns CrReceiptFolioDateParticularsVNTotalPostageStationaryTravelling expensesOffice expensesLedger folioLedger account15000CBMar1Cash Mar3Bus fare11200 1200 Mar5stamps2800800 Mar10Stationary32200 2200 Mar 15Office messenger42800 2800 Mar 17Mr. V53800 PL13800 Mar 18telegrams6900900 Mar23Train fares72100 2100 Mar 24Carbon papers8700 700 Mar 27Office expenses91150 1150 15650 Jan 31Cash 156501700290033003950 3800 15000 Jan 31Balance 30620 SolutionGiven below is the ledger balance as on March 31 2011, by using the columnar petty cash book −General ledger as on 31.03.2011DebitCreditPostage accountPg1Amount31.03.2011Petty cashPCB11700DebitCreditStationery accountPg2Amount31.03.2011Petty cashPCB12900DebitCreditTravelling expensesPg3Amount31.03.2011Petty cashPCB13300DebitCreditOffice expenses accountPg1Amount31.03.2011Petty cashPCB13950
Read MoreHow to prepare columnar petty cash book?
Refer the data given below−Transactions (Year 2015) (*in rupees)Jan 1 Received cash float 25000Jan 3 Paid for bus fare 1500Jan 5 Bought stamps 1000Jan 10 Paid for stationary 2800Jan 15 Paid office messenger 2200Jan 17 Paid to Mr. V 3200Jan 18 Paid for telegrams 800Jan 23 Paid for train fares 1750SolutionThe solution for columnar petty cash book as per the above mentioned data is as follows − Analysis columns CrReceiptFolioDateParticularsVNTotalPostageStationaryTravelling expensesOffice expensesLedger folioLedger account25000CBJan1Cash Jan 3Bus fare11500 1500 Jan 5stamps210001000 Jan 10Stationary32800 2800 Jan 15Office messenger42200 2200 Jan 17Mr. V53200 PL13200 Jan 18telegrams6800800 Jan 23Train fares71750 1750
Read MoreExplain columnar petty cash books and give its format
Columnar petty cash books consist of both debit and credit sides. In this book, there are many columns which record day to day expenditures.All the particulars (cash receipts and expenses) which are recorded all together in a single column are called a particular column and in other columns date of transactions of debit or credit is recorded.Amount received from the chief/head cashier is recorded in the debit column.Amounts spent are recorded in the credit column in each column.Debit balance = amount of cash receipt – total amount of cash paymentsFormatThe format of columnar petty cash book is as follows −TRCBFDatePVNTPP&TCSTEMELLF Here, ...
Read MoreHow transactions are entered in a petty cash book?
We will understand how to enter the transactions in a petty cash book with the help of two examples which are given below.Example 1Transactions for July, petty cashier gets Rs.300/- in advanceJuly 2 Paid for kitchen supplies Rs. 40/-July 5 Paid for birthday cake Rs.95/-July 10 Paid for lunch Rs.85/-July 25 Paid for taxi fare Rs. 35/-July 28 ...
Read MoreDescribe Preparation accounts receivable and accounts payable ledger postings
We can prepare accounts receivable and accounts payable ledger postings by using triple column cash book entries. Refer the data given below −454 – Discount allowed ledger number (expense account)480 – Discount received Léger number (revenue account)SolutionThe solution is as follows −Accounts receivable ledgerM&CO no. 28DateDescriptionPRAmount($)DateDescriptionPRAmount($)April 5thCash311350April 5thDiscount allowed3118H&CO no. 18DateDescriptionPRAmount($)DateDescriptionPRAmount($)April 24Cash312200April 24Discount allowed3116Accounts payable ledgerS&CO no. 42DateDescriptionPRAmount($)DateDescriptionPRAmount($)April 3Bank311800April 3Discount Received3115April 19Bank312100April 19Discount Received3112XY Inc no. 59DateDescriptionPRAmount($)DateDescriptionPRAmount($)April 25Bank31630April 25Discount Received3114
Read MoreHow are contra entries done in the cash books?
Refer the data given below −TransactionsAug 1 Bank balance b/d $28000Aug 1 Cash balance $1200Aug 3 Paid cheque for laptop $1050Aug 11 Cash withdrawn from bank for office use $700Aug 13 ...
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