Debits & CreditsDouble Entry Accounting System
Checking Cash Transactions
To check cash transactions, you check the control account, only.
How it Works
By month end, you should have a complete record of cash transactions.
You will have one record of them in the general accounts.
Because you use a double entry, you will have a duplicate record of those transactions in the checking account.
As such, the checking account should contain the same transactions as shown in the other accounts.
For your record of transactions to be correct, they should be the same as those shown in the checking account.
This why the checking account is known as a control account.
All you need check is the control account.
If correct, because of the double-entry, all the other accounts should be correct, as well.
To check your record of cash transactions, you compare your checking account to the month end bank statement.
If the records agree, it shows the control account is correct.
Get a Full Understanding
In this mini course, you have seen how the double entry system works with one of the control accounts: the checking account
If you want to fully understand the system, there are two other control accounts you should understand, as well.
To do this, sign up for a free trial and read sections:
- Recording Customer Transactions
- Recording Supplier Transactions
© R.J. Hickman 2020