cash disbursement and cash receipts journal

by April
(Texas)

I am trying to take over the accounting end of my husbands small Tile installation business. All he has handed me is the bank statements, a ton of receipts, and some ck stubs of income he has received for his services. One of the issues I am having is missing stubs for some of the deposits that he has made. In other words I cannot locate the source from which some of the deposits are coming from. The bank does not scan the checks into the system and do not have access to that information after so many months. He has not recorded any incoming or outgoing cash flow. Like I mentioned all I have is bank statements, some ck stubs, carbon copies of his checkbooks and a ton of receipts. Any suggestions on how I should start recording for this tax filing. Do i need to match up the receipts to the bank statements? A good portion of the receipts as cash paid. How does that fall into the category? What does a cash withdrawal fall under? Any guidance will be appreciated. Thanks


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What a great wife you are!

Sometimes all we have are bank statements and check stubs. If that's all we have to go on, then here's what we do.

Deposits are listed as "Sales". Going forward into the new year, try to capture each customer. But for now, just record each deposit as "Sales".

Go thru the check carbons and try to list out each check, and its business purpose. From there you can classify it to an expense - such as Office Supplies or whatever.

The receipts - if they're for deposits, just put them aside. Keep them, but they're not useful for more than backup because they don't show the individual checks that were deposited. If they're for cash disbursements, then list them as disbursements and classify them to an expense.

If the receipts were for cash disbursements, find out if that was business cash or your husband's personal cash. If personal cash, then the total will be a contribution of Owners Equity into the business, or, if he is an S-Corp, a note payable to him from the company.

Does that help?

Kathy

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