CHAPTER 25


Cash Book, General Ledgers and Trial Balance


2.12 Prepare a cash account to monitor income received and payments made by an organisation, evaluate its financial position and recommend a course of action; post figures to relevant ledgers and extract a trial balance.


Cash Book


Analysed Cash Book


Double Entry Trial Balance


Debit Overdraft Ledger


Credit


VAT (Value Added Tax)


T-account


KEY SKILLS


1. Record transaction to a cash book/ analysed cash book.


2. Balance a cash book/analysed cash book.


3. Calculate VAT on sales and purchases for an analysed cash book.


Chapter L.O.


2 1.2 22 2.9 23 2.10 24 2.11 26 2.13


28 3.2


4. Post an analysed cash book to the general ledgers.


5. Complete a trial balance using balances from the general ledger.


6. Evaluate a financial position and recommend a course of action from its cash book.


CLASS ACTIVITY


Conor and Siofra run Jers-ease Ltd, a small business that sells custom sports jerseys. In their first month, they took in €3,900 and spent €3,600.


INTRODUCTION


Every business needs to know how much money came in and went out of its bank account each month. The Cash Book is where a business records this. By the end of the month, the balance shows whether the business has money in its bank, or if it owes money to the bank (called an overdraft).


258


a) How much money is left in the bank at the end of the month?


b) Name two examples of how the business may have earned money.


c) Name two examples of what the business may have spent money on.


d) If they had spent more than they earned, what problem might this cause?


LINKS COURSE


KEY WORDS


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