Why are cash receipt and cash disbursement orders needed?
Every soum enters and leaves the till with a document. What the orders are, who signs them and which journal entries they relate to.
In the evening, Jasur, a shop owner, counted the cash in the till. His notebook said 3 000 000 soums, but the till held 2 800 000. Where were the remaining 200 000? Cash orders exist precisely to answer such questions.
What are cash orders?
- Cash receipt order: a document confirming that cash has come into the till (sales proceeds, cash withdrawn from the bank, an advance returned by an employee)
- Cash disbursement order: a document confirming that cash has left the till (payment of wages, an advance for household expenses, a deposit to the bank)
Why are they needed?
- You can see where every soum in the till came from and where it went
- A shortage or surplus is quickly detected
- During an inspection, cash movements are proven with documents
- The accounting record (journal entry) is made on the basis of exactly this document
Who signs them?
The signatures on an order show who is responsible for the cash movement. Who exactly must sign is set by the current cash rules: fix this procedure in your company according to them.
Which journal entries are linked to them?
| Document | Example | Journal entry |
|---|---|---|
| Receipt order | cash withdrawn from the bank | Dt 5010 – Ct 5110 |
| Receipt order | an employee returned the unused part of an advance for business expenses | Dt 5010 – Ct 4230 |
| Disbursement order | an advance for business expenses issued to an employee | Dt 4230 – Ct 5010 |
| Disbursement order | cash deposited to the bank | Dt 5110 – Ct 5010 |
Test yourself
5 questions on this topic: pick an option or reveal the answer.
The retail company "Qorasuv market" bought software for the checkouts in its sales floor for 36 000 000 soum and recognized it as an intangible asset in account 0430. The accounting policy sets the straight-line method and a useful life of 36 months, with no residual value. How is the monthly amortization recorded?
A founder of "Qamashi transport" LLC transferred a truck to the company in payment of his share in the charter capital. The founders agreed to value the truck at 150 000 000 soum (the law provides for no other procedure). Under NAS No. 21, what journal entry records the receipt of the truck?
The "Oq oqim" dairy obtains cream and skimmed milk simultaneously from the same raw milk. Costs up to the split-off point are 40 000 000 soum. Output: cream 1 000 kg (expected proceeds 30 000 000 soum), skimmed milk 3 000 kg (expected proceeds 20 000 000 soum). Under the method based on sales value at the split-off point, how much cost is allocated to the cream?
An employee was given an advance from the till for general business expenses. What journal entry is made?
Cash was withdrawn from the bank into the till. What journal entry is made?
Answered: 0 / 50 of 5 correct
All tests →See also
Sources
- NAS No. 21 "Chart of Accounts" · accounts 5010, 4230
- Examples · prepared by the author