Introduction to Cash at Bank and in Hand
Cash at bank and in hand refers to amounts which are held by a business in the form of notes and coins (e.g. petty cash) or which are held at a bank in the form of on demand deposits such as current accounts and savings accounts.
Cash at bank and in hand is part of current assets in the balance sheet.
How do you record Cash at bank and in hand?
As there are usually a large number of entries, cash at bank and in hand transactions are not normally recorded directly into the general ledger.
Cash at bank movements are recorded in the Cash Book and cash in hand movements are usually recorded in the Petty Cash Book.
For example if a cheque is used to pay a supplier for £100, and an payment is received from a customer for £300 the following entries would be made in the cash book.
|Cash In||300||Cash Out||100|
Finally the totals in the cash book would be posted to the General ledger accounts using a journal