How to account for Cash in Hand

Cash in hand are monetary resources at hand either in the cash box or cash till of the business

How to account Cash in hand;

When cash in hand increases

Due to capital introduced in the business

DR Cashbook

CR Capital a/c

Due to cash sales

DR Cashbook

CR Sales a/c

Due to loan borrowed

DR Cashbook

CR Ban loan a/c

Due to repayment of debt by a debtor

DR Cashbook

CR Trade debtor

When cash in hand decreases

Due to purchase of inventory

DR Purchases

CR Cashbook

Due to purchase of non-current asset

DR Non-current asset

CR Cashbook

Due to payment to creditors

DR Creditors a/c

CR Cashbook

Contra Entry transactions; There is neither an increase nor decrease in cash in the business for it is as good as transferring cash from your shirt pocket to the trouser pocket. No actual cash outflow from the business. That is,

If cash is deposited in to the bank account of the business from the cash box

DR Bank  a/c

CR Cashbook

 If cash is withdrawn from the bank account to the cash box

DR Cashbook

CR Bank a/c