Cash Disbursements Journal: Definition with Sample
Following tutorial on cash Disbursements journal will help you to learn:
- What is Cash Disbursements Journal
- What is Cash Payment Journal
- Why cash disbursements or cash payment journal is used
- Sample of Cash Disbursements Journal
- Format or Template of Cash Disbursements Journal
The payments of any business which are made in cash are generally recorded in a separate cash disbursements journal. Like other special journals the cash disbursements journal which is also known as cash payments journal is used to record those cash payments which are most common and frequently happen in the business.
Sample Cash Disbursements Journal
The cash disbursements journal contains several accounts such as, Other Accounts (CR), Cash (CR), Purchase Discounts (CR), Accounts Payable (DR), Sales Salaries Expense (DR), General and Administrative Salaries Expense (DR), and Other Accounts (DR) columns. The different columns are used to records different accounts. For example The Purchase Discounts and Accounts Payable columns contain the account for payments of those products which are previously purchased. The payments of salaries are recorded in the columns of The Sales and the General and Administrative Salaries Expense. The Other Accounts (DR) column records the cash purchases of merchandise and other payments for which there are no special columns. Most of the companies make their all payments by check. In this when each transaction is recorded in the cash payments journal, and then the related check number is entered in the column at the right of the Date column. The check numbers are basically very useful for controlling cash payments, and they also provide a useful cross-reference. In the accounts payable subsidiary ledger, the amounts that are entered in the Accounts Payable Dr. column are posted to the individual creditor accounts. These postings should be frequently recorded. After each posting, CP and the page number of the cash payments journal are inserted in the Posting Reference column of the account. A check mark is positioned in the Posting Reference column of the cash disbursement journal which designate that each amount has been properly posted.
At regular periodic intervals, each individual item in the Other Accounts Dr. Column is also posted individually to an account in the general ledger. By writing the account number in the Posting Reference column of the cash payments journal the posting of account will be recognized. At the end of the month, each of the amount columns in the cash payments journal is totaled. The sum of the two debit totals must equal to the total amount of credit column. As each of the totals of the other two columns is posted to the general ledger, an account number is inserted below each column total.