Which date to record for a transaction?

Question

I need to record a transaction in a journal. If I take the date of the paper receipt, this might be different to the date on my bank statement. Which one should I use? Should I use one, and then record the other in some notes? In general, if you have several source documents that "prove" a financial transaction has taken place, what should be the process to translate these to financial records? The reasons might be for auditing, reconciling with source documents, tax or management purposes.

Answer 1

It would depend on what type of accounting you are using; cash or accrual. If you are using cash-basis accounting, then you would record the transaction using the date that monies were physically taken out of your account. If you are using accrual basis, then you would record the transaction whenever you received goods or services, or when you performed goods or services; regardless is monies were taken out at that time. If you are using accrual basis, then there will be a time gap between when the goods or services were rendered and when the monies were withdrawn or deposited, this creates the items in our bank reconciliations known as outstanding checks, and deposits in transit. As long as you have recorded the items, your books and bank will reconcile.