CHAPTER 5 – RECORDING ACTUAL INCOME AND EXPENDITURE
3. Look at the analysed cash book below and answer the questions that follow. DR
Date 2017
Details
1/1 Balance 2/1 Wages
3/1 Child Benefit
F Total Wages Child Ben. Date
€€€ b/d 200
950 950 140
5/1 Groceries 9/1 Petrol
140 13/1 Family meal 16/1 Electricity 19/1 Car service 23/1 Groceries 31/1 Balance
1,290 950 140 1/2 Balance b/d 655
a. What is meant by the entry on 1 January? b. What is the greatest source of income for the family? c. What is the greatest expenditure for the family? d. What is meant by the balance b/d on 1 February?
4. Explain what is meant by contra entry.
5. Complete the budget comparison statement below and answer the questions that follow. BUDGET COMPARISON STATEMENT
Income Wages
Child Benefit Other
Total income
Expenditure Mortgage
Car expenses Insurance Groceries
Light and heat Entertainment
Total expenditure Net cash
Budgeted
2,149 140 0
2, 289
850 80
485 420 190 80
2,105 184
Actual
2,149 140 150
2,439
850 130 460 510 148 150
2,248 191
a. Is the family’s actual financial situation better or worse than the budget? Explain your answer. b. How much did the family plan to save?
c. Why do you think entertainment and groceries are more likely to show differences than mortgage and Child Benefit?
d. Draw a suitable chart to show the family’s budgeted and actual expenditure. Difference
