Receipts-for-Banking Holding Account

Software: MoneyWorks accounting software

For some businesses, such as retail business, you have lots of cash or credit card payment received daily.

It may not be practical for you to record as deposit for each receipt into the actual bank account, since you will only do a banking-in at the end of the day or once every few days. Hence, Bank Statement will show a lump sum rather than individual transacted amount of the receipt. If every cash receipt were to record into the actual bank account, then, you may have to do a manual calculation to total up the receipts in your MoneyWorks bank account so to check against the actual deposited amount in the Bank Statement during the Bank Reconciliation.

To resolve this, you can set a “suspense” Bank account to temporary hold the cash received and do a banking-in (lump sum) upon actual depositing of cash into the actual bank. In this case, the amount show in the MoneyWorks bank account will be same as the Bank Statement.

How to set a “Suspense” bank account?

From Show menu, select accounts. Then, click the “New” button to add a new bank account (example: Cash in transit, bank account type).

Next, go to the Bank Settings tab of the newly added bank account, example: Cash in transit, select the checkbox for “Receipts-for-Banking Holding Account”.

Reference: Page 38 of MoneyWorks User Guide, Bank Setting – Receipt-for-Banking Holding Account 

Assuming you created a new bank account, Cash in Transit, to receive all the cash from sales. You received two payments from credit customer, S$2,000.00 for payment one and S$3,500.0 for payment two. You deposited these two payments into Cash in Transit account.

The double entry for these two transactions will be:

Debit: Cash in Transit account

Credit: Accounts Receivable

Assuming, on the following day, you deposited the $5,000.00 of the cash received into our Actual Bank and remainder $500.00 will keep it as a Petty Cash.

Reference: Page 105 of MoneyWorks User Guide, The Banking Command

From the Command menu, select Banking. In the Banking Window, select Cash In Transit account from the “Deposit from” drop down list. Highlight the receipt you wanted to deposit, the total amount to be deposit will show in the “Amount Selected” field.

To split your selected amount into two accounts, Petty Cash and Actual Bank, you select the first “Transfer” checkbox and enter [ 500.00 ] into the entry box next to the first “Transfer” checkbox. Next, select the “Petty Cash” account from the “of cash to” drop down list.  In this case, you do not have any Bank Service Charge or Surcharge; so, leave the second checkbox unchecked. MoneyWorks will automatically update the “Net Deposit” to $5,000.00. Simply select your Actual Bank account at the “to” drop down list.

You may consider clicking the “Print” button to print your Deposit Slip. If not, click the Deposit button to save your transaction.

On the next window, MoneyWorks will prompt you to record your Transaction Date, Period, Description, and Analysis information (if any).

This transaction will be recorded as a Journal transaction type (Fund Transfer). The double entry for this transaction will be:

Debit: Actual Bank account

Debit: Petty Cash account

Credit: Cash in Transit account

This method is useful for user who needs to record lots of Cash or Credit Card transactions daily.

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