How to Record Cash Received or Payment in the Ledger

Ordinarily, cash paid out is usually recorded in a special book of accounts called a cash book. The examples below show how cash received and paid out are recorded in the ledger.

Example 1:

2^nd August 2016, Cash sales N5,000

Solution:

Dr. Cash A/c
Cr. Sales A/c

Note: The business organization received cash of N5,000 as a result of the sales, therefore, cash A/C was debited. If the cash A/C is debited, obviously, the corresponding account should be entered on the credit side of sales to complete double entry.

Example 2

3^rd Sept. 2016. Bought a motor van by cash N2,000

Solution:

Dr. Motor Van
Cr. Cash A/C

Note: The two accounts opened involved two asset accounts