Accounting – 2.2 Business documents | e-Consult

To determine the net cash inflow for June, the business needs to calculate the total cash received and subtract the total cash paid. Here's how each document contributes:

• Invoice: The invoice shows the amount the business is owed by a supplier. It represents a cash *outflow* as the business has already incurred the expense. The amount on the invoice is deducted from the total cash paid.
• Credit Note: The credit note reduces the amount owed on the original invoice. It represents a reduction in the cash *outflow*. The amount on the credit note is subtracted from the original invoice amount.
• Cheque Counterfoil: The cheque counterfoil shows the details of a cheque issued by the business. This represents a cash *outflow*. The amount of the cheque is recorded.
• Paying-In Slip: The paying-in slip shows the cash deposited into the business's bank account. This represents a cash *inflow*. The amount deposited is recorded.
• Receipt: The receipt shows cash received from a customer. This represents a cash *inflow*. The amount received is recorded.
• Bank Statement: The bank statement provides a record of all transactions in the business's bank account. This confirms the cash inflows (deposits) and outflows (payments) recorded on the paying-in slips and cheque counterfoils. It allows for verification of the amounts and dates.

The net cash inflow is calculated as: Total Cash Inflows - Total Cash Outflows. The business would sum the amounts from the receipt and paying-in slip (cash inflows) and then subtract the amounts from the invoice, credit note, and cheque counterfoil (cash outflows). The bank statement is used to verify these figures.