Business Documents for Cash Transactions | Accounting for GCSE/IGCSE - Year 11 PDF Download

What is a receipt?

• A receipt serves as a documented proof of a cash payment made.
• When a customer pays for goods with physical cash, a supplier issues a receipt to them. Sometimes, a receipt is also provided when payment is made using funds from the customer's bank account.
  • Apart from receipts, other business documents can also be utilized to record these types of transactions. Other business documents may also be utilized to record these transactions

Example of a cash receipt

Cheques & Cheque Counterfoils

What is a cheque?

• A cheque serves as a payment method.
• It is drafted by the customer and provided to the supplier.
• The supplier subsequently takes the received cheques to the bank for deposit into the business bank account.
• Essential components of a cheque include details of the customer's bank account, the supplier's name, the payment amount, the cheque writing date, and the customer's signature.
• The supplier utilizes the cheque as the official payment documentation.
  • This occurs when the customer opts to pay using a 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 such as the name of the payee, the amount to be paid, and the date of the cheque
• The customer tears off the cheque and hands it to a supplier as payment
• The customer retains the cheque counterfoil as a record of the payment

Example of a cheque with a counterfoil

What is a paying-in slip?

• A paying-in slip is a document used for depositing cash and/or cheques into a bank account. It serves as a record of the deposit transaction.
• The paying-in slip includes the following details:
  • The total amount from cash
  • The total amount from cheques
  • The total amount being deposited
  • The date of the transaction

Example of a paying-in slip

What is a bank statement?

• A bank statement is a document regularly provided by a bank to account holders.
• It contains a comprehensive record of all financial transactions during a specific period.
  • This document displays the flow of money into and out of a business' bank account.
• Additionally, it outlines the starting and ending balances for the specified timeframe.
• Bank statements serve as essential tools for businesses to track and reconcile various transactions, including:
  • Payments made via credit transfers
  • Transactions conducted through telephone transfers
  • Debits processed via direct debit arrangements
  • Regular payments made through standing orders
  • Details regarding bank charges and accrued interest

What is a direct debit?

• A direct debit is a method used by businesses to make regular payments to individuals or other businesses through automated bank transfers.
• The recipient of the payment sets up the direct debit, and the paying business must agree to the terms.
• Direct debits allow for flexibility in payment amounts and dates, accommodating changes as needed.

What is a Standing Order?

• A standing order is a method used by businesses to conduct regular bank transfers to individuals or other businesses.
• The standing order is initiated by the paying business.
• Payments within a standing order are consistent in value and timing.
• Dates for payments are predetermined, often occurring on the same day each month.

Example of bank statement

A Summary of Business Documents for Transactions