What I may already know: • It is important to keep a record of our income and expenditure.
• What we actually receive or spend is often different to what we plan to receive or spend.
Learning Intentions
In this chapter, I will learn: • The difference between cash and bank transactions. • To prepare a simple cash account and bank account. • To balance an account. • To prepare an analysed cash book for an individual or household. • To compare budgeted income and expenditure with actual income and expenditure. • To analyse the financial position of an individual or household.
Key Words: Account Transaction Cash account Bank account
Debit (DR) Credit (CR) Balance c/d Balance b/d
Analysed cash book Contra entry
WHAT IS THE DIFFERENCE BETWEEN A BUDGET AND AN ACCOUNT?
In chapter 4, we learned how to prepare a budget. A budget is a record of planned income and expenditure. In this chapter, we will find out how to keep a record of actual income and expenditure.
