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Cash Payments or Disbursements Journal - Explanation, Format and Example - Accounting For Management
Cash Payments or Disbursements Journal - Explanation, Format and Example - Accounting For Management
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The cash disbursements journal (also known as cash payments journal) is a special journal that is used by a
business to manage all cash outflows. In other words, a cash disbursements journal is used to record any transaction
that includes a credit to cash. All cash inflows are recorded in another journal known as cash receipts journal.
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1/27/2020 Cash payments or disbursements journal - explanation, format and example | Accounting for Management
1. The individual amounts in the accounts payable column are posted daily (or immediately, if a computer
software is used) to accounts payable subsidiary ledger and the individual amounts in other accounts column are
posted daily (or immediately, if a computer software is used) to relevant accounts in the general ledger.
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1/27/2020 Cash payments or disbursements journal - explanation, format and example | Accounting for Management
2. The totals of cash, inventory and accounts payable columns are posted at the end of the period (usually one
month) to the relevant accounts in the general ledger. The total of other accounts column is not posted to any
account.
Example
Consider the following example for a better understanding of how entries in a cash disbursements journal are made
and how the posting to accounts payable subsidiary ledger and general ledger is performed.
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1/27/2020 Cash payments or disbursements journal - explanation, format and example | Accounting for Management
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