Banking and Cash Transactions

The key combination for post dated voucher is Ctrl + T.

  Alt + C is used for creating new ledger while passing a voucher.

A voucher is a written document that evidences a business transaction. It serves as the primary source document for recording entries in accounting books. Receipts, credit notes, and memos serve different purposes but vouchers specifically support transaction recording.

Cheque bouncing due to insufficient funds is a punishable offence under Section 138 of the Negotiable Instruments Act. The drawer can face imprisonment up to 2 years and/or a fine. This provision was introduced to ensure financial discipline and protect the interests of payees. Other options like issuing post-dated cheques or uncrossed cheques are not criminal offences under normal banking operations.

Illegal tender refers to counterfeit money or unauthorized currency that cannot be legally used. It is not the same as black money (unaccounted wealth), mutilated cheques (damaged physical cheques), or dishonored cheques (bounced due to insufficient funds).

Alt + F8 key is used to activate Delivery Note Voucher.

Ctrl + A is used to save and accept the Transaction screen.

A cash book is a subsidiary book used to record all receipts and payments made in cash or through a bank. Transactions that do not involve an immediate exchange of cash, such as credit sales or credit purchases, are excluded. It serves as both a journal and a ledger account for cash.

Under the imprest system of petty cash, a fixed sum of money is provided to the petty cashier at the start of a period. This fixed amount is called the imprest amount or float. At the end of the period, the petty cashier is reimbursed for the exact amount spent to restore the balance to the original imprest level.

A bank overdraft occurs when an account holder withdraws more money than is currently available in their bank account. This results in a negative balance, effectively creating a short-term loan from the bank. It is a common credit facility provided to businesses to manage temporary cash flow shortages.

A contra entry occurs when a transaction affects both the cash and bank columns of a double-column cash book. For example, depositing cash into the bank or withdrawing cash from the bank for office use requires an entry on both the debit and credit sides. These entries cancel each other out in terms of the total liquid assets of the business.

When a business maintains a cash book, all cash-related transactions (including cash purchases and cash sales) are recorded directly there. Consequently, these transactions are excluded from the specialized journals like the purchase book and sales book, which only record credit transactions. They are also not recorded in the general journal.

In a standard cash account, the debit side represents receipts and the credit side represents payments. Since a business cannot spend more physical cash than it has received, the debit total will always be greater than or equal to the credit total. This results in a debit balance, representing cash on hand.

Salary is an expense paid in cash, which represents an outflow of funds from the business. In a cash book, all cash payments are recorded on the credit side, while all cash receipts are recorded on the debit side.