The cash book

A book of prime entry in which all cash and bank transactions are recorded.

• Cash book

• Petty cash book

• General ledger

• Bank and cash account

An allowance given to a customer when an account is settled within a time limit set by the supplier.

• Sales discount

• Discount received

• Cash discount

• Trade discount

Appears on both sides of the cash book. It appears in the debit column of either the cash or bank and the credit column of the other account.

• Contra entry

• Contra

• Discount

• Cash and bank

A cheque received which the customer’s bank refuses to pay. This may be because there is not enough money in the bank account or because there is an error on the cheque.

• Rejected cheque

• Cheque error

• Bank overdraft

• Dishonoured cheque

Occurs when the money taken from the bank is greater than the balance in the bank. This represents the amount owed to the bank.

• Bank loan

• Bank overdraft

• Credit balance

• Overdraft

A reduction in the invoice total offered by a business to its credit customers to encourage early settlement of invoices.

• Cash discount

• Discount received

• Discount allowed

• Trade discount

• $800

• $1000

• $10 300

• $10 500

Organize the below transaction into the right account:
Paid $392 to Samir by telephone transfer, having deducted 2% cash discount from the amount due.

Groups:

(a) Discount received

,

(b) Discount allowed

,

(c) Bank

,

(d) Cash

• No entry

• $392

• $0

• $8

Organize this transaction into the right account:

Received a cheque, $388, from Ivan, in full settlement of a debt of $400.

Groups:

(a) Discount allowed

,

(b) Discount received

,

(c) Bank

,

(d) Cash

• No entry

• $388

• $0

• $12

• A

• B

• C

• D