Practical Accounting.
#10. "Double Entry Bookkeeping Entries for a Cash Selling Cycle."



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A quick reminder for you of the principles of Double Entry Bookkeeping.
There is always two entries of every transaction. In and Out.

Debit is In. DR.
Credit is Out. CR.

When you buy and sell on a "Cash" basis,
Entries will be made in the following books of accounts.

The Cash Buying Cycle.

Buy: Records are made into the STOCK Book. Debit is In.
This keeps track of PRODUCTS coming IN from a supplier. Into the store.

Pay: Records are made into the CASH Book. Credit is Out.
This keeps track of the CASH Going OUT to a supplier.

The Cash Selling Cycle.

Sell: Records are made into the STOCK Book.
This keeps track of PRODUCTS going OUT to the customer. “Credit is Out”.

Collect: Records are made into the CASH Book.
This keeps track of the CASH coming IN from the Customer. “Debit is In”.

When you buy and Sell on a Cash basis, Product and Cash move at the same time.

The transaction is complete. No record in the Customer book or the Supplier book is necessary.

Another Business Tip from learn Accounting Fast.com.

Next: "Recording A Business Transaction On A Credit Basis"
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