VT Cash book advice

[saddlers]

I am now keeping track of my income and outgoings via cashbook, and it seems to be a very useful way of forcing me to keep track of my records, and is ideal for the amount of transactions I get. However I am having a bit of an issue with getting the opening balances to work.

I will use simplified figures just to make the maths easier!!

If i introduced £4,000 into the business as capital introduced, VT cash book shows this as a liability, so my Capital A/C is -£4,000. If £3,000 of this was used to purchase stock and the remainder (£1,000) was intended to go into the current A/C as cash available, how does this get accounted.

If I try to transfer £1,000 from the Capital A/C to the current A/C, the Capital A/C now goes to -£5,000. Whereas if I give the capital A/C a positive figure and transfer the cash to the current A/C, the company has no liability for my capital introduced. Does that make sense....am I missing something completely obvious?

Thanks

 

[faradaykeynes]

Entry will be
Dr Purchases 3000
Dr Bank 1000
Cr Capital a/c 4000

If you like to make any drawings, then it will be
Dr Drawings
CR Bank

End of year your drawing account will be net off against capital a/c to work out net capital

 

[Scalloway]

In your first scenario your balance sheet will be

Assets
Stock...........£3,000
Bank............£1,000
...................£4,000

Liabilities
Capital A/C...£4,000
...................£4,000

The capital account is the amount the business owes you at any point in time.

 

[Anna Chandley]

If you had already paid £3,000 for the purchases and paid the remaining £1,000 into your bank the easiest way to enter this on cashbook would be

Receipt into current bank account of £4,000 with capital account as the analysis account.

Payment from current bank account of £3,000 with the analysis account being the appropriate expense account)s).

 

[MyAccountantOnline]

...................
If i introduced £4,000 into the business as capital introduced, VT cash book shows this as a liability, so my Capital A/C is -£4,000. If £3,000 of this was used to purchase stock and the remainder (£1,000) was intended to go into the current A/C as cash available, how does this get accounted.

In VT cashbook you are recording in's and out's so that they match/mirror your bank statement.

You wont do anything with the £1,000 its accounted for automatically as £4,000 will have gone into the bank account and £3,000 will have gone out.

 

[saddlers]

Thanks everyone, the penny has dropped