Module 6: Trading Organisation: Subsidiary Journals and Posting to the General Ledger 6.3 Analysis Cash Book
An Analysis Cash Book can take the place of a CRJ and CPJ. The Cash Book as a book of first entry has a receipt and a payment side. It takes the place of the CRJ and CPJ and it also replaces the bank account in the General Ledger.
When posting to the General Ledger from the Cash Book, the bank account is excluded as it is already being done in the Cash Book.
Differences between a Cash Journal and the Cash Book Cash Journals
1. Cash Journals include: • Cash Receipts Journal • Cash Payments Journal
2. The Cash Journal folio numbers are made up of the letters CRJ for Cash Receipts Journal and CPJ for Cash Payments Journal
3. The journals do not have debit or credit sides.
5. The total cash receipts and total cash payments are posted to the bank account in the General Ledger.
6. Totals including the Bank column totals, as well as sundry accounts entries are all posted from the journals to the debit and credit side of the accounts in the General Ledger
7. A Bank Reconciliation Statement will be drawn up from a comparison of entries in the: • Bank account in General Ledger • Cash Receipts Journal • Cash Payments Journal • Current bank statement • Previous Bank Reconciliation Statement.
Example
The following transactions took place during February 20.1. Complete the Cash Book of Elvina Wholesalers and close off the books on 28 February 20.1.
On 1 February 20.1 the favourable bank balance was R12 280 (DR). Provide the following columns in the Cash Book:
Debit side: Analysis of Receipts, Bank, Sales, Cost of Sales, Trade and other receivables, Sundry Accounts Credit side: Bank, Trading Inventory, Wages, Trade and other payables, Sundry Accounts
Cash Book
Another name for an Analysis Cash Book is a columnar Cash Book.
The Cash Book folio number is made up of the letters CB for Analysis Cash Book
The Cash Book has a debit and credit side. 4. The Bank account is found in the General Ledger. The bank account is found inside the Cash Book.
The total cash receipts and total cash payments are not posted to the General Ledger.
Totals excluding the Bank column totals, as well as sundry accounts entries are all posted from the journals to the debit and credit side of the accounts in the General Ledger
A Bank Reconciliation Statement will be drawn up from a comparison of entries in the: • Analysis Cash Book • Current bank statement • Previous Bank Reconciliation Statement
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