Cash at Bank and in Hand

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 Book
Date Narrative Amount Date Narrative Amount
8/5/2013 Supplier A 100
9/5/2013 Customer B 300
Cash In 300 Cash Out 100
Balance 200

Finally the totals in the cash book would be posted to the General ledger accounts using a journal

Double entry posting to the General Ledger
Cash 300 100
Purchase ledger 100
Sales ledger 300
Total 400 400
Last modified November 19th, 2018 by Team

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