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Cash Disbursement Journal: Definition, Example and Format

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Cash Disbursement Journal: Definition, Example and Format

A cash disbursement journal is a great way to keep track of your spending and save you from financial pitfalls. It not only helps you keep track of your finances, but it also helps you see how your spending habits are changing over the years. You can look back on your old cash disbursement journals to see how much you spent and which habits you developed.

A cash disbursement journal (CDJ) is a document that is prepared to maintain a detailed record of all public company cash disbursement activities. A CDJ can be used to improve internal and external controls and provide an audit trail of cash movement across the company. A CDJ can be prepared by a company’s controller, controller’s assistant or other internal or external accounting staff.

It is very common for employers to send employees checks, as payment for their work done, every month or every two weeks. These are not large checks, and they are usually paid out on a regular schedule. However, employers still send small checks by mail to their employees as gifts or to pay for other matters.. Read more about cash disbursement journal format and let us know what you think.

Feb 26, 2021
Accounting Blog by audit site

Definition

When a business makes cash transactions, the bookkeeper or accounting software can record them in a Cash Disbursement Journal. This journal is a specialized journal to record all cash outflows of the business. Note that any cash inflows are recorded in the Cash Receipts Journal. By itemizing all cash payments, the Cash Disbursement Journal helps businesses organize and manage their outgoing cash records.

Format

Let’s take a look at how this bookkeeping journal looks like. This journal includes a date, check number (in most cases, a check is written instead of physical cash being paid or disbursement is made in any other form of immediate payment), and the name of the payment recipient. Next, you would specify what the payment was made for by recording the name of the account being debited and its reference (PR) number.

The payment amount is recorded in the Cash column. The Inventory column is used to account for any discounts. For this reason, you might see it being simply referenced as Purchases Discount. For any cash payment that does not involve purchases, the bookkeeper would use the Other Accounts column. The Accounts Payable section is used to record the amount for which the supplier’s account is debited.

Examples

There are multiple cases when this particular journal is used. These include payment of cash for:

  • Cash purchases
  • Various business expenses
  • Accounts payable or creditors.

Another example would be refunds for goods returned that are made in cash or cash equivalents. Now, let’s record an example transaction.

On January 17th, B&B Supply issued check number 167 to Robbins Corp. to buy store supplies for $780.

First, we enter the date and check number. Under the payee, we will write Robbins Corp. The accounted debited in this case will be Store Supplies and since it does not fall under Accounts Payable, we will enter the amount under the Other Accounts. In the Cash column, we will enter the corresponding credit amount.

Cash Disbursements Journal

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26. February 2021
Accounting blog on the audit website.

Definition

When a business makes cash transactions, a bookkeeper or accounting program can record them in a cash journal. This journal is a special journal for recording all outgoing cash flows of the company. All incoming payments are recorded in the incoming payments journal. By detailing all cash payments, the cash book helps companies organize and maintain their cash accounts.

Format

Let’s see what this ledger looks like. This log contains the date, the number of the check (in most cases, a check is written in lieu of a physical cash payment or other form of immediate payment), and the name of the payee. Then indicate the reason for the payment by giving the name of the account to be debited and its reference number (PR).

The amount of the payment is recorded in the Cash column. The Inventory column is used to book any discounts. That is the reason why you may come across the simple name of discount on purchases. For any cash payment that is not a purchase, the bookkeeper uses the Other Accounts column. The Vendors section is used to record the amount debited from the vendor account.

Examples

There are many cases where this protocol is used. This includes paying money for :

  • Cash purchases
  • Miscellaneous business expenses
  • Accounts Payable or Accounts Receivable.

Another example is the return of goods in cash or cash equivalents. Now let’s write an example transaction.

The 17th. In January, B&B Supply wrote check No. 167 to Robbins Corp. for goods in the amount of $780.

First, we enter the date and number of the check. In the Receiver column, we write Robbins Corp. The debited account in this case is the inventory requirements account, and since it is not part of the accounts payable, we book the amount under the other accounts. In the Money column we state the corresponding credit amount.

Cash Flow Journal

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Date Don’t check. Receiver Receivables PR Cash – RCA Inventory – CR Other accounts – DR Trade debts – RR
January 17. 167 Robbins Corp. Accessories shop

The cash disbursement journal is a financial tool that is used to track cash disbursements (payments) to various accounts, such as the following:. Read more about cash disbursement journal example transactions and let us know what you think.{“@context”:”https://schema.org”,”@type”:”FAQPage”,”mainEntity”:[{“@type”:”Question”,”name”:”What is the format of cash disbursement journal?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” The cash disbursement journal is a record of cash transactions. It is used to track the movement of money in and out of the business.”}},{“@type”:”Question”,”name”:”What is a cash disbursements journal?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” A cash disbursements journal is a record of all cash transactions that occur in a business.”}},{“@type”:”Question”,”name”:”What type of entry is recorded in cash disbursement journal?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” Cash disbursement journal is used to record cash transactions.”}}]}

Frequently Asked Questions

What is the format of cash disbursement journal?

The cash disbursement journal is a record of cash transactions. It is used to track the movement of money in and out of the business.

What is a cash disbursements journal?

A cash disbursements journal is a record of all cash transactions that occur in a business.

What type of entry is recorded in cash disbursement journal?

Cash disbursement journal is used to record cash transactions.

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