Cash receipts are written or printed documents providing records of cash sales. Most cash receipts list the quantity of each item purchased, the date of the transaction, the dollar amount of the sale and the amount of sales tax. Cash receipts can either be written by hand or generated by a computer or cash register.
Purpose of Cash Receipts for the Buyer
When a business purchases an item from another business and receives a cash receipt, this document provides the basis of a ledger, or accounting book, that tracks business purchases and divides them by category, such as materials or equipment. Even if a business owner does not record a purchase in his ledger immediately, he can refer to the cash receipt at a later date when compiling his ledger, provided he keeps all of his receipts and organizes them effectively.
Purpose of Cash Receipts for the Seller
A seller's copy of a cash receipt is a record of a transaction that must be reported as business income. Sellers keep copies of cash receipts either in the form of cash register logs, database copies of computer generated receipts, or carbon copies of handwritten receipts. A seller's archive of cash receipts should be numbered consecutively so that, in the event of an audit, he can verify that the receipts he is presenting represent all of the transactions he has made.
Managing Cash Receipts
When you are filing and storing cash receipts from business purchases, arrange these receipts chronologically and store them in folders representing days, weeks or months, depending on the number of cash purchases that your business makes. Store cash receipts from business sales in a similar manner, in separate folders from your purchase receipts. Use these receipts when compiling your ledgers. Keep cash receipts for at least five years, to back up the information on your tax returns in case of an audit.
Petty Cash Fund
Many of the cash purchases that your business makes will come out of your petty cash fund, which is usually a cash box kept on the business premises holding a sum of money that the business replenishes when the funds are depleted. A petty cash box should include a petty cash log which lists purchases made with its funds, including the date and amount of each transaction, as well as a running total of the money remaining in the fund.
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