Cash On Hand Transaction In Fastest Bookkeeping Services With QuickBooks Online Accountant

 

Cash On Hand Transaction In Fastest Bookkeeping Services With QuickBooks Online Accountant.

 

Does the company that you keep books for do a lot of cash on hand transactions?

In this article of Fastest Bookkeeping Services you will learn the best way to handle

And manage cash on hand related transactions

 

 

Cash On Hand Transaction

§  In theory any business that receives or Pays cash for services

§  Should have one specific physical place Where the cash is located this place Should be secure like a lock box or office safe where money can be put Into or taken out when you have A transaction.

§  Very often this place is simply the owner's wallet

§  However as long as the transactions are recorded properly the amount of physical cash should be Reflected In the account balance in QuickBooks Online.

 

Cash On Hand Account Setup in QuickBooks Online

So how do we set up Cash On Hand Account in QuickBooks Online for cash transactions? Well there should be one account in the chart of accounts that records any change in the amount of cash this account is a bank type of account.

What is cash on hand in QuickBooks

CASH ON HAND is a bank type of account because you will keep records of transactions. Exactly the same way that you would keep records of a bank account. You will deposit or put money into this place and you will withdraw or pay money from taking out money from this place. The account name can be CASH ON HAND or PETTY CASH. If you intend on paying only small amounts of incidental expenses.

Now you may remember in our chart of accounts we already have an account called CASH ON HAND that will represent the physical cash that we will use to manage the business and notice it's already a bank type of account because that's what we set up when we prepared the QuickBooks online account for This Fastest Bookkeeping Services.

There are Three Types of Cash On Hand Transaction….

1.       Cash On Hand Internal Account Transactions- Internal Account Transactions mean fund Transfer from Chase Bank Account to Cash On Hand Account or Cash On Hand money deposit to Chase Bank Account.

2.       Cash On Hand Payments Transaction- That made any Payment by Cash.

3.       Cash On Hand Income Deposit Transaction- Received Cash Directly from Customer by sell Goods or Services.

1. Cash On Hand Internal Account Transactions

Cash On Hand Internal Account Transaction example……….

 

On January 12th, 2022 we withdrew 500 dollars from the chase bank account to establish the cash on hand fund that will be used to pay expenses.

 

Since you are depositing money into the CASH ON HAND account or the lock box you may use the deposit window.

 

Even though there might be other more advanced options that you could learn about later that would record this transaction and give you the same result but let's keep it as simple as possible click new so what date is that that's January 12^th,2022.  

Now what will be the result after this transaction? Well this is what the trial balance looks like right now before we take 500 dollars from the bank account and put it into CASH ON HAND. At the moment we remove 500 from the bank the balance will go down to $4550.  CASH ON HAND will show up for the first time as 500 dollars and this will be the result of that transaction.

Cash On Hand Internal Account Transaction Posting in QuickBooks Online

So we click new and we go to the bank deposit window. Now you have to change this to CASH ON HAND because as we learned before in the bank deposit window the bank account on top is the one. that the money is being deposited into the account at the bottom is where the money is coming from and in this case the money is coming from the BANK ACCOUNT to the CASH ON HAND you can leave received from blank in this case and the date that you're taking the money from the bank to the CASH ON HAND is January 12, 2022. Of course you would put in all the other details but mainly the amount is $500 and this would be the simplest way to record taking money from the bank account down here and bringing it to the cash on hand when we click save and close.

 

Cash On Hand Internal Account Transaction Report Analysis

you can click reports trial balance and you can see the results are exactly as what we expected the cash in chase bank went down to $4550 and CASH ON HAND showed up in the trial balance for the first time as 500 dollars.

 

2. Cash On Hand Payments Transaction

 

Cash On Hand Payment Transaction example……….

On January 13, 2022 Paid Delivery expenses $50 from the cash on hand for a business related transportation with Ned's taxi cash receipt #987654

 

You must use the expenses window to record any payments from the CASH ON HAND.

 

Now what will be the result? Well if you're paying from CASH ON HAND $50 dollars. That means that the balance will decrease by $50 and become 100 dollars but if you paid fifty dollars more for transportation with that cash now have fifty dollars more in transportation expense and that will become a hundred and fifty dollars and these will be the numbers after you record this transaction.

Cash On Hand Payment Transaction Posting in QuickBooks Online

We go to the top left then click new+ and for Cash On Hand Payment Transaction we click expenses. Now the payment account that you're paying from is CASH ON HAND because in the expense window this will be the account that you're paying the money from, now we're paying Ned's taxi.

 

We get this message that's a little distracting let's click no because it's asking should we use information from a previous nets taxi transaction to put into this transaction because it thinks it's helping us. Just click no and then you yourself can put in transportation expense and you can put in the amount 50 dollars and don't forget to put in the number on the cash receipt. Now click save and close.

 

The results in the trial balance are exactly what we expected cash on hand has decreased to 450 dollars and transportation expense has increased to a hundred and fifty dollars.

 

3.Cash On Hand Income Deposit Transaction

 

Cash On Hand Income Deposit transaction Example………..

On January 14, 2022, Betty boop paid Wanda $250 cash for doing an editing service receipt # 1122334.

We will use the deposit window.

We are depositing into the Cash On Hand income deposit transaction for money we earned from editing services.

 

What will be the result? Well CASH ON HAND will increase by $250 dollars because we have 250 dollars Income from Betty boop by provided editing services it will become $700.

 

In the top left we click new and go to the right and click bank deposit the date is January 14^th now remember in the deposit window on top you have to choose the account you're depositing to and in this case we're actually depositing to the Cash On Hand.

Now we click save and close the results are exactly as what we expected. We now only have 700 dollars cash on hand.