CA Foundation · Accounting · Accounts from Incomplete Records
A trader who keeps incomplete records prepares a Cash and Bank Summary for the year. Which of the following would appear on the receipts (debit) side of this summary?
Cash sales and collections from debtors appear on the receipts side of the cash and bank summary because they are inflows of money. Salaries, drawings and furniture purchases are payments, so they go on the payments side.
- APayment of salaries by cheque
- BCash sales and collections from debtorsCorrect
- CDrawings made in cash by the proprietor
- DPurchase of furniture for cash
Explanation
A cash and bank summary is a Receipts and Payments type of account. Money coming in, such as cash sales and collections from debtors, is shown on the receipts side. Salaries, drawings and furniture purchases are outflows and appear on the payments side.
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