Business management

Introduction to accounting

Financial accounting

Cash accounting purchase transaction example

As seen earlier in this chapter, cash accounting processes transactions through payments processed from payment vouchers (bank cards...) or bank statements (cheques, bacs).

For the example that follows, the supplier's bank statement from the debit-credit convention example page will be used as a proof of the payment to illustrate this example.

PURCHASE JOURNAL Inwards Outwards
Account Operation title Debit Credit Date Invoice
600PCH   Purchase of x items weight/height/... 1,200   21 Feb.14 536524

BANK PAYMENT JOURNAL Inwards Outwards
Account Operation Debit Credit Date ---
500BNK   Payment to supplier S. inv. 536524 1,200   21 Feb.14 ---

This example shows basic accounting entries for a purchase transaction in a cash accounting system.

As this example shows, the date used for this transaction is the payment date on the bank statement (cheque payment) or a payment receipt (using a bank card) when available.

Last change 1st June 2014