VCE Accounting Unit 1 - Chapter 6.
Cash Accounting For Service
Businesses
Service business - answerA small business that operates by providing its time, labor or
expertise (or a combination of all three) in return for a fee or charge.
Examples: Hairdressers, Motor Mechanics, Editors, Mechanics
Three items that are treated as 'cash' in an accounting system. - answer- Cash on hand
(i.e. coins in a cash register)
- Cash in the firm's bank account
- Any cheques it may have received from customers.
Cash Receipts
(Define) - answerThe amount of cash the business has received from other entities
during a period, and its sources (i.e. where it has come from)
Cash Payments
(Define) - answerThe amount of cash the business has paid to other entities during a
period, and its uses (i.e. what it was spent on)
Bank Balance
(Define) - answerThe level of cash on hand at a particular point in time.
Cash receipts will increase a firm's bank balance, while cash payments will decrease
that balance.
Source documents that provide evidence of:
Cash Receipts - answer- Cash receipts
- Cash Register Roll
- Bank Statement
Source documents that provide evidence of:
Cash Payments - answer- Cheque Butt
- Bank Statement
Journal
(Define) - answerAn accounting record which classifies and summarises transactions
during a particular reporting period
Cash Receipts Journals
Cash Accounting For Service
Businesses
Service business - answerA small business that operates by providing its time, labor or
expertise (or a combination of all three) in return for a fee or charge.
Examples: Hairdressers, Motor Mechanics, Editors, Mechanics
Three items that are treated as 'cash' in an accounting system. - answer- Cash on hand
(i.e. coins in a cash register)
- Cash in the firm's bank account
- Any cheques it may have received from customers.
Cash Receipts
(Define) - answerThe amount of cash the business has received from other entities
during a period, and its sources (i.e. where it has come from)
Cash Payments
(Define) - answerThe amount of cash the business has paid to other entities during a
period, and its uses (i.e. what it was spent on)
Bank Balance
(Define) - answerThe level of cash on hand at a particular point in time.
Cash receipts will increase a firm's bank balance, while cash payments will decrease
that balance.
Source documents that provide evidence of:
Cash Receipts - answer- Cash receipts
- Cash Register Roll
- Bank Statement
Source documents that provide evidence of:
Cash Payments - answer- Cheque Butt
- Bank Statement
Journal
(Define) - answerAn accounting record which classifies and summarises transactions
during a particular reporting period
Cash Receipts Journals
