The Cash Disbursement Journal is a specialized accounting record used to track and document all cash payments made by a business. It provides a detailed record of each disbursement, including the date of payment, payee name, purpose of payment, and the corresponding amounts. The Cash Disbursement Journal helps businesses monitor cash outflows, manage expenses, and maintain financial control.
How to Fill the Cash Disbursement Journal for BIR Compliance
To ensure compliance with the Bureau of Internal Revenue (BIR) in the Philippines, the Cash Disbursement Journal should be filled out accurately and consistently. Here’s a step-by-step guide:
Use a Bound Journal Book:
Use a bound and paginated journal book to maintain the integrity of records.
Column Headers:
Common columns in the Cash Disbursement Journal include:
Date
Payee Name
Voucher Number
Description
Cash (Debit)
Accounts Payable (Credit)
Other Accounts (if applicable)
Record Transactions Promptly:
Record each cash payment transaction as it occurs to ensure the journal is up-to-date.
Complete Information:
Ensure each entry includes the date, payee name, voucher number (if applicable), a brief description of the payment, and the amounts debited and credited.
Debit and Credit Entries:
For each disbursement, debit the appropriate expense or asset account and credit the Cash account.
Attach Source Documents:
Attach or reference source documents such as receipts, invoices, or vouchers for each entry.
Consistent Format:
Use a consistent format for all entries to ensure clarity and uniformity.
Sample Cash Disbursement Journal Entries
Here’s an example of how to record transactions in the Cash Disbursement Journal for BIR compliance, covering transactions for a fictional business, PBC, for the period January to March 2024.
Cash Disbursement Journal of PBC
For the Period January to March 2024
| Date | Payee Name | Voucher Number | Description | Cash (Debit) | Accounts Payable (Credit) | Other Accounts (if applicable) |
|---|---|---|---|---|---|---|
| Jan 05 | Supplier A | VCH-1001 | Payment for raw materials | 500,000 | ||
| Jan 10 | Rent Agency | VCH-1002 | Payment for January rent | 50,000 | ||
| Feb 05 | Utility Company | VCH-1003 | Payment for electricity bill | 20,000 | ||
| Mar 15 | Supplier B | VCH-1004 | Payment for office supplies | 30,000 |
January 2024
Date: January 5
Payee Name: Supplier A
Voucher Number: VCH-1001
Description: Payment for raw materials
Cash (Debit): 500,000 PHP
Date: January 10
Payee Name: Rent Agency
Voucher Number: VCH-1002
Description: Payment for January rent
Cash (Debit): 50,000 PHP
February 2024
Date: February 5
Payee Name: Utility Company
Voucher Number: VCH-1003
Description: Payment for electricity bill
Cash (Debit): 20,000 PHP
March 2024
Date: March 15
Payee Name: Supplier B
Voucher Number: VCH-1004
Description: Payment for office supplies
Cash (Debit): 30,000 PHP
Key Points for BIR Compliance:
Accuracy:
Ensure all figures are accurate and match the supporting documents.
Timeliness:
Record transactions promptly to keep the journal up-to-date.
Completeness:
Do not leave blank spaces or lines between entries to prevent unauthorized insertions.
Legibility:
Ensure all entries are clear and legible. Corrections should be done properly with a single line strike-through and initialed by the responsible person.
Supporting Documents:
Keep all related documents (receipts, invoices, vouchers, etc.) organized and easily accessible for audit purposes.
By following these guidelines, the Cash Disbursement Journal will meet BIR compliance standards and provide a reliable record of all cash payment transactions.
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