- This topic has 3 replies, 2 voices, and was last updated 4 years ago by
.
- Posts
Q)
1) Purchase return
2) Sales invoice
3) Bank charges
4) Cash salesWhich of the above items will appear in an entity’s cash book ?
Answer : 3) & 4)
Sir, can you please explain why the first two items won’t appear ?
Returning goods to a supplier does not involve any movement of cash. (Later the supplier might refund the money – that would appear in the cash account but that is a separate issue. And of course they might not refund the money – instead they might just replace the goods if they were returned because they were faulty.)
Similarly just sending an invoice to a customer does not involve any movement of cash. Hopefully the customer will sometime pay the invoice, but again that is a separate transaction. As and when the cash is received there will be an entry in the cash account.
- The topic ‘Financial statements’ is closed to new replies.