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• # 73051
• Mon 18 Jul 2011 09:15 AM

Hello,

I am new on here and currently stuyding for my Level 1 exam and almost ready to sit the exam.  I have had a quick look at a mock exam paper.  There is pre-printed ledger accounts for the candidate to complete.  On this paper I noticed that there is a 'cash account' and a 'bank account'.  Can someone please expalin the difference?  As throughout my study text it has refered to a cash OR a bank account but never both in the question and I thought these would be the same thing? 

thanks

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• # 73054
• Mon 18 Jul 2011 10:52 AM

Hi Mrs B

A cash account is basically the ledger account dealing with a business's cash transactions, and the bank account is the ledger account dealing with cheque and direct debit/standing order/BACS transactions.  If you are a business dealing with cash transactions then you will also have monies transferring between the two accounts, for example when you bank your takings. The bank account is reconcilable with the bank statement issued by the business's bank.

Hope this helps. 

• Debbie
  www.beckcottage.com
  
  

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• # 73055
• Mon 18 Jul 2011 11:02 AM

Hi Debbie,

Thanks, that really helps I understand it now.  Just think I was confused as the kaplan book as only ever used one or the other.

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