Lets 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!!!
Lets
see how you get on with this simple scenario:
·
Where
there is an opening debit bank balance of £12,030 and the totals recorded in
the cash book for the year ended 30 April 20X5 were:
Receipts |
£106,950 |
Payments |
£121,490 |
Assuming
there were no year-end adjustments, what will be the opening balance in the
cash book as at 1 May 20X5?
£_________
debit / credit
I’m
sure you would have got this correct and known that it will be……..
£2,510 credit since the cash book balance does not have money left in
it, so it will have a credit balance.