Business Documents for Cash Transactions (Cambridge (CIE) O Level Accounting)

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

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

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

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 Summary of Business Documents for Transactions