Business Documents for Cash Transactions (Cambridge (CIE) IGCSE Accounting)

Revision Note

Receipts

What is a receipt?

  • A receipt is used as a record of a cash payment

  • A supplier issues a receipt to a customer when they pay for goods using physical cash

    • Sometimes a receipt is issued when the customer pays using money in their bank account

      • Other business documents may also be used to record these transactions

A cash receipt showing the name of the supplier, name of the customer and amount of the transaction
Example of a cash receipt

Cheques & Cheque Counterfoils

What is a cheque?

  • A cheque is a form of payment

  • It is written by the customer and given to the supplier

  • The supplier takes the cheques they receive to the bank and deposits them into the business bank account

  • A cheque will contain:

    • The details of the customer’s bank account

    • The name of the supplier

    • The amount to be paid

    • The date on which the cheque is written

    • The customer’s signature

  • The supplier will use the cheque as the business document for payments

    • When the customer pays by cheque

What is a cheque counterfoil?

  • Cheques are attached to counterfoils in a chequebook

  • When a customer writes a cheque they also fill in some basic details on the counterfoil

    • The name of the person who is being paid

    • The amount to be paid

    • The date that the cheque is written

  • The customer tears off the cheque and hands it to a supplier as payment

  • The customer keeps the cheque counterfoil

    • This is used as a record of the payment

Completed cheque with a completed counterfoil
Example of a cheque with a counterfoil

Petty Cash Vouchers

What is a petty cash voucher?

  • A petty cash voucher is a document used when paying for small valued purchases using petty cash

    • This is usually done when a cheque would not be appropriate due to the low value

  • The customer pays the supplier using money from the petty cash till and records the details on a voucher

  • The information from the vouchers is then transferred to the petty cash book

Paying-In Slips

What is a paying-in slip?

  • A paying-in slip is a document used when depositing cash and/or cheques into a bank account

  • The paying-in slip is kept by the business as a record of the deposit

  • It contains:

    • The total amount from cash

    • The total amount from cheques

    • The total amount being deposited

    • The date

Example of a paying-in slip
Example of a paying-in slip

Bank statements

What is a bank statement?

  • A bank statement is issued regularly by a bank

  • It details all the bank transactions within a given period

    • It shows money that goes in and out of the business' bank account

  • It shows the opening and closing balances for that period

  • A bank statement is used as a business document to identify and reconcile:

    • Payments by credit transfer

    • Payments by telephone transfer

    • Payments by direct debit

    • Payments by standing order

    • Bank charges and interest

What is a direct debit?

  • A direct debit is used by a business to make recurring bank transfer payments to a person or another business

  • The direct debit is set up by the person or business receiving the payments

    • The business that makes the payment needs to agree to the terms

  • The payments can change

    • The dates of the payments

    • The amounts of the payments

What is a standing order?

  • A standing order is used by a business to make recurring bank transfer payments to a person or another business

  • The standing order is set up by the business making the payments

  • The payments are fixed

    • The dates are determined in advance

      • It could be the same day each month

    • The amounts are the same for each payment

A bank statement showing all the transactions for a fixed period
Example of bank statement

A Summary of Business Documents for Transactions

Transaction

Business document for the customer

Business document for the supplier

The customer buys goods on credit from the supplier

Purchases invoice

Sales invoice

The customer returns goods to the supplier

Credit note received

Credit note issued

The customer pays a supplier using cash

Receipt

Receipt

The customer pays a supplier using petty cash

Petty cash voucher

Receipt

The customer pays a supplier using a cheque

Cheque counterfoil

Cheque

The customer pays the supplier by credit transfer, telephone transfer, direct debit or standing order

Bank statement

Bank statement

The supplier deposits the cash and cheques into their bank

None

Paying-in slip

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Dan Finlay

Author: Dan Finlay

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Dan graduated from the University of Oxford with a First class degree in mathematics. As well as teaching maths for over 8 years, Dan has marked a range of exams for Edexcel, tutored students and taught A Level Accounting. Dan has a keen interest in statistics and probability and their real-life applications.

Lucy Kirkham

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Lucy has been a passionate Maths teacher for over 12 years, teaching maths across the UK and abroad helping to engage, interest and develop confidence in the subject at all levels.Working as a Head of Department and then Director of Maths, Lucy has advised schools and academy trusts in both Scotland and the East Midlands, where her role was to support and coach teachers to improve Maths teaching for all.