JUNIOR CYCLE BUSINESS STUDIES Opening and Closing Balances
The first entry in the analysed cash book is the opening bank balance. This is the closing balance from the previous month. For example, if the closing bank balance in May is €500, then the opening bank balance for June is €500.
The opening balance is recorded on the debit side of the account, as it is money the business has in the bank.
DR Date 1/6 Balance Details
ANALYSED CASH BOOK € Date
F b/d 500
If the closing balance for May was minus €500, then the business is starting June with an overdraft of €500. This is recorded on the credit side of the account.
DR Date Details
ANALYSED CASH BOOK € Date
F 1/7 Balance CR Details F b/d € 500
The balance at the end of the account shows the amount in the bank at the end of the period in question.
Recap: How to Balance an Account Step 1 Total the analysis columns.
Step 2 Calculate the total of both bank columns (debit and credit side). Skip a line after the last transaction on the side of the account with the most transactions listed and put the largest number in the total of both bank columns.
Step 3 Find the balance by subtracting both bank totals from step 2.
Step 4 Fill the balance in above the bank total on the side that does not add up to this number. This is the balance carried down (c/d) and is shown on the last day of the month.
Fill the balance in on the opposite side of the account underneath the bank total. This is the balance brought down (b/d) and is dated the first day of the new month.
Preparing an analysed cash book for a business A
Go to page 138 of your Activities and Accounts Book to complete analysed cash books for a number of businesses.
The analysed cash book for a not-for-profit organisation, such as a charity, social organisation or club, is prepared in the same way as the analysed cash book for a business. The only difference is that the analysis columns are likely to record receipts such as donations, fundraising, sponsorship and Lotto funding.
