CHAPTER 5 – RECORDING ACTUAL INCOME AND EXPENDITURE Step 4
The same balance is then entered on the opposite side beneath the total. Here, it is called balance b/d (balance brought down). The first day of the next week (or month, if it is a monthly account) is entered beside balance b/d, as it is the opening cash for the next period.
The balance b/d in Tara’s cash account is shown in the debit side, as she has €16 leftover when her money out is subtracted from her money in.
CASH ACCOUNT Date
5/10 9/10
Debit side (money in) Details
Pocket money Birthday money
€ Date
20 3/10 40 6/10 7/10 8/10 9/10
10/10 Balance b/d
60 16
• Balance c/d is always above the total. • Balance b/d is always brought down on the opposite side, below the total.
We will
learn more about bank overdrafts in chapter 6
GO
Note that the balance b/d in a cash account will always be on the debit side, as a person cannot spend more cash than they have received. This may not always be the case in a bank account. A balance b/d on the credit side of a bank account means that the account is overdrawn, i.e. the account holder owes the bank this sum of money.
Personal cash account A
Go to page 35 of your Activities and Accounts Book to complete a personal cash account over a period of two weeks.
PREPARING AN ANALYSED CASH BOOK
The account that records all of the money received and paid out by a person or household during a given period is called an analysed cash book.
An analysed cash book includes analysis columns that break the different types of income and expenditure into categories, such as Wages and Electricity. These columns allow the person or household to see exactly where money is coming in from and where money is being spent.
