Cash disbursements journal

Definition

A cash disbursements journal is a specialized accounting record used to track all payments made by a business. It includes details such as date, amount, payee, and purpose of each payment.

5 Must Know Facts For Your Next Test

1. It helps in organizing and summarizing cash outflows.
2. Each entry typically includes the date, check number, payee name, and account debited.
3. It simplifies the process of posting transactions to the general ledger.
4. Serves as an internal control mechanism to monitor cash payments and prevent fraud.
5. Frequently reviewed by stakeholders for financial planning and auditing purposes.

Review Questions

Related terms

General Ledger:

A comprehensive record of all financial transactions made by a company.

Accounts Payable:

Liabilities or debts owed by a business to its suppliers or creditors.

Special Journals:

Accounting records used to categorize repetitive transactions into specific types like sales, purchases, or cash receipts.