• A record of actual income and expenditure is called an account. • A transaction is a financial event that is recorded as an entry in an account. • A cash transaction involves incoming or outgoing amounts of cash. • A bank transaction involves the movement of money in and out of a bank account.
• A record of all the money received and paid out by a person or household during a given period is called an analysed cash book.
• Money going out is shown on the credit side (CR) of a cash book. • Money coming in is shown on the debit side (DR) of a cash book.
• Contra entries require a debit entry and a credit entry for a single transaction. This occurs when cash is withdrawn from a bank account or when cash is paid into a bank account.
• Presenting the information from an analysed cash book in a visual form can provide a clear picture of any patterns in the account.
• A budget comparison statement makes it easy to compare budgeted and actual income and expenditure figures and shows the differences between these figures.
Taking stock A
Go to page 52 of your Activities and Accounts Book to check what you have learned in chapter 5.
stions
1. Copy and fill in the blanks. a. A ____________ is used to record planned income and expenditure.
b. An ____________ is used to record actual income and expenditure. c. A ____________ ____________ involves incoming or outgoing amounts of cash. d. A ____________ ____________ involves the movement of money in and out of a bank account. e. Money going out is shown on the ____________ side of a cash book. f. Money coming in is shown on the ____________ side of a cash book. g. ____________ entries require a debit entry and a credit entry for a single transaction.
2. Outline the steps taken to balance an analysed cash book.
