Understand Classification of Non Cash Transactions with Experts Under One Roof

The non cash transaction is a part of Accounts. Along with the cash transaction, the importance of non cash transaction is also there. However, the transaction in this part is classified into different small parts. Each one obeys some particular conditions and by following those conditions the records are kept in each section properly.

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What do you mean by a non cash transaction?

Why the term is a non-cash transaction? It is very important for a business to have an account book. It is also important for them to understand the ways of keeping records. Some records in the form of cash incoming or outgoing can be managed through the cash transactions and the record gives a perfect idea of profit or loss or anything else which helps the business and cash flow statements to prepare reports.

Another part is non-cash transaction and this means when the dealing of materials or anything else is done with the help of credit in place of cash. A business may run in the way where credit as well as debit records are important.

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What are the various types if Classification of non cash transactions?

It is important to know that records related to non cash transactions are not very simple and it can be bulky if they are kept in a single book. Thus, to avoid the problems, classification is done.

  • Subsidiary books – These books keep all records of transaction for different purposes. This section is further classified into other various forms to make each transaction suitable.
  • Journal Proper – This is also known as General journal or all purpose books. Those records which are very simple, but unknown for a subsidiary book is kept under general journal.

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What are the different classifications of subsidiary books?

  • Purchase book or purchase journal
  • Sales book or sales journal
  • Purchase return book or purchase return journal
  • Sales return book or sales return journal

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