Cash

Definition: Currency on hand and in bank accounts

Scope:Very BroadDifficulty:Very Easy

Currency on hand and in bank accounts

Common Journal Entries
AccountDebitCredit
1. Receive payment from customer
Customer pays $4,800 on account.
CashAsset+$4,800
Accounts ReceivableAsset−$4,800
Cash increases, A/R decreases. Total assets unchanged.
2. Pay vendor invoice
Pay $2,300 owed to supplier.
Accounts PayableLiability−$2,300
CashAsset−$2,300
Liability and cash both decrease.
3. Record cash sales
Daily cash sales total $1,750.
CashAsset+$1,750
Sales RevenueRevenue+$1,750
Cash increases with revenue recognized immediately.

T-AccountsA visual representation of a ledger account shaped like the letter T. Left side shows debits, right side shows credits.

CashAsset account. Debits increase the balance. Credits decrease the balance.AssetA resource owned by the business. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
$4,800.00
$1,750.00
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$2,300.00
$4,250.00
Accounts ReceivableAsset account — amounts owed by customers. Debits increase the balance. Credits decrease the balance.AssetA resource owned by the business. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$4,800.00
$4,800.00
Accounts PayableAccounts PayableLiabilityAn obligation the business owes to others. Normal balance: credit. Credits increase, debits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
$2,300.00
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
Normal bal. ▶
$2,300.00
Sales RevenueRevenue account — income from selling goods or services. Credits increase the balance. Debits decrease the balance.RevenueIncome earned from business operations. Normal balance: credit. Credits increase, debits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$1,750.00
Normal bal. ▶
$1,750.00
DurationShort-Term

Related Reports

Related Subjects

Used in Formula

See Also

External Links

  • Cash — Wikipedia