Let’s talk some more on the movement of money in the cash book?
Dr- Receipts
Cr- Payments
When money is received the bank balance increases and when money is paid out, the bank balance reduces. J
Simple hey!!!
Let’s see how you get on with this simple scenario:
-
Where there is an opening credit bank balance of £12,030 and the totals recorded in the cash book for the year ended 30 September 20X4 were:
|
Receipts |
£121,490 |
|
Payments |
£106,950 |
Assuming there were no year-end adjustments, what will be the opening balance in the cash book as at 1 October 20X4?
£_________ debit / credit
I’m sure you would have got this correct and known that it will be……..
£2,510 debit since the cash book balance will still have some money left in it, so it will have a debit balance.