A reliable record begins with evidence
Source documents support the occurrence, amount, date and nature of transactions. They include invoices, receipts, credit notes, debit notes, payment vouchers and bank advices according to the business process. An invoice requests payment or records a sale on stated terms; a receipt acknowledges money received. They are not interchangeable. A delivery note can support evidence of goods delivered without necessarily showing the financial settlement. A purchase order authorises or requests goods but does not by itself establish that they have been received or that a payable should be recorded.
The document must be read from the recording entity's perspective. A supplier's invoice is a purchase invoice to the buyer and a sales invoice to the seller. A credit note issued by a seller commonly reduces the customer's amount owed because of a return or allowance. Its effect in the buyer's books is correspondingly different. Before posting, identify who issued the document, who received it and what transaction it changes. The title alone cannot replace that analysis, especially when documents refer to earlier transactions.
Choose the appropriate book of original entry
Under a simple periodic inventory system, credit purchases of goods for resale go to the purchases day book, and credit sales of those goods go to the sales day book. Returns outwards concern goods returned to suppliers; returns inwards concern goods returned by customers. Cash transactions go through the cash book. Purchases of equipment do not belong in the trading-goods purchases day book merely because they were bought on credit. The general journal or another suitable system records transactions outside the specialised books.
Day-book totals summarise one side of entries while individual customer or supplier postings preserve personal balances. For credit sales, customers are debited individually and the total is credited to sales in the elementary system. For credit purchases, suppliers are credited and purchases debited. A school problem may provide a particular posting convention, so follow it consistently. Duplicate posting of the total and every individual amount to the same nominal account would overstate that account. Cross-references help show what has already been posted.
Single, double and three-column cash books
A cash book records receipts and payments and can serve as the ledger account for cash and bank. A single-column form records one monetary column on each side. A two-column form commonly records cash and bank. A three-column form also includes discount columns in the traditional layout. The cash column cannot normally have a credit balance because physical cash cannot be paid out beyond what is held. A bank column can show an overdraft under the account arrangement. Distinguish these features instead of assuming cash and bank are identical in every respect.
A contra entry transfers money between cash and bank within the business. If cash is deposited into the business bank account, bank is debited and cash credited; both entries appear in the cash book and are marked as contra under the usual convention. It is neither new nor a payment to an outside supplier. A withdrawal from bank for office cash reverses the sides. A withdrawal for the owner's personal use is drawings, not a cash-to-bank contra transfer. The purpose determines the accounts.
Trade discounts and settlement discounts
A trade discount reduces the invoice price, often according to trade terms. In elementary bookkeeping, it is normally deducted before the transaction is entered and is not separately posted as a discount account. A settlement or cash discount rewards payment under specified terms and is recorded according to the method used in the question. Discount allowed is a concession to a customer; discount received is a concession from a supplier. Their direction depends on whose books are being prepared. Never assume the same transaction is discount allowed to both parties.
Suppose a list price is ₦50,000 with a 10% trade discount. The invoice amount is ₦45,000. If the buyer later qualifies for a 2% settlement discount on that invoice amount, the discount is ₦900 and payment₦44,100 under the simple traditional method. The two discounts are successive, not a combined 12% of list price. Read whether discount is actually earned and what base it uses. A promised discount that has not qualified under the question's terms should not simply be assumed.
Petty cash and the imprest system
Petty cash handles small routine payments supported by vouchers. Under an imprest system, a fixed authorised float is established and later reimbursed for approved expenditure to restore the float. If the float is ₦20,000 and supported payments total₦13,600, cash remaining is ₦6,400 and reimbursement is ₦13,600. Reimbursement is not a second expense; the expense classification comes from the vouchers. Analysis columns can group transport, postage and other categories, while a total-payment column checks their sum.
The custodian should keep cash and evidence secure, record payments promptly and avoid mixing personal money with the float. A cash shortage requires investigation and the appropriate authorised treatment, rather than inventing a voucher to agreement. A float can be increased or reduced through approval; that change is separate from reimbursement of spending. The question may combine both. Identify the original float, approved spending, closing cash and new target before calculating the transfer required.
Control, errors and self-check
Documents should be authorised, numbered or otherwise traceable, checked for duplication and matched to evidence of receipt where relevant. Digital documents also require access controls and audit trails. Scanning a document does not prove authenticity, while a correct amount can still be assigned to the wrong account or period. Clear narration should state the transaction without unnecessary private details. A complete record allows another person to trace the figure from evidence through the books to the ledger and report.
Self-check: a customer settles an old debt in cash. Record the receipt against the receivable rather than making a new sale. Self-check: goods are ordered but neither received nor invoiced under the simple scenario. A purchase order alone does not justify recording the purchase as completed. To answer a document question, name the evidence, identify its issuer and purpose, choose the book and show the affected accounts. This sequence reduces errors caused by memorising document names without following the transaction.