Cash Disbursements

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Learn about Cash Disbursements

All companies pay for materials and services. In most companies, the recording of the payments accounts for the majority of the bookkeeping work performed.

What will affect the way that I record cash disbursements?

One will be the reporting method that the company has elected to use. If you are on a Cash Basis, you will delay recording the bills until they are paid. If you are on a Accrual Basis, you will record the invoices as soon as they are received, using Accounts Payable as a holding account until the invoice is paid.

Assume that we receive a invoice from ABC Supply Company for inventory purchases in the amount of 145.00:

Cash Basis (recorded when the invoice is actually paid)

Debit Description	Debit	Credit	Credit Description
Inventory	145.00
		145.00	Cash in Bank

Cash Basis

Trans. Date	J/E No	Description	Reference	DR or -CR Amt	Account
08/31/2003	CD-8	ABC Supply Company	3346	145.00	1200
08/31/2003	CD-8	Cash Account Offset	3346	-145.00	1020
This is an example of a single check distributed to 1 account

If you have questions about Accrual Basis accounting, email us.

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Cash basis:
An accounting method where transactions are recorded when the actual change of payment occurs, regardless of when the goods or services are delivered.

Accrual basis:
A method of accounting where transactions are recorded as they occur regardless of when payment for that transaction is made or received.