What is a Cash Journal?
A cash journal is a simple hard copy or electronic document that is used to make immediate accounting entries of both receipts and expenditures. Transactions that are entered into this journal are usually recorded daily, or at least in chronological order. Part of the document's charm is that financial transactions entered as line items can be reviewed quickly when necessary, and it provides a quick reference when entering the transactions into other sections of the accounting books.
Businesses can use a cash journal for keeping up with a broad range of receipts and payments, or it may be used to track one area of activity. Many businesses choose to maintain a simple journal as a means of keeping a record of income and disbursements associated with a petty cash fund. This can allow authorized employees to handle a transaction out of petty cash and make a quick entry with the basic information. At a later time, the transaction can be fully documented in the balance sheet ledger or other appropriate record.
The key to an effective cash journal is entering enough information about each financial transaction to properly account for the income or expense. Generally, the document will include columns to record such basic detail as the originator of the transaction, cash in or out, the amount of the cash associated with the line item, the date of the transaction, and a brief description of the action. This is usually enough information to allow a more comprehensive recording at a later date.
Even a home budget can benefit from using this principle. Using a simple columnar book or an electronic spreadsheet, it is possible to set up a simple journal that everyone can use. This will make it possible to track all the expenses associated with running the household, along with funds that are set aside for that purpose.
yeah, there should be examples shown.
it's difficult to imagine how expenses should be recorded when there are no examples given by accounting sites.
I do think it is important that a sample is shown, especially for those who are not accounting oriented.
show cash journal sample.
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