The Analysed Cash Book: Basic Cash Accounts
In the last chapter (Budgets), we learned how important it is to plan ahead
with regards to our income and expenditure so that we live within our means
and do not overspend.
The analysed cash book now allows us to record our actual income and
expenditure that happens in a given period (example a week in March) by
preparing household accounts. These household accounts will allow us to
compare our actual income and expenditure with our budgeted income and
expenditure (similar to our actual v difference budgets)
Bookkeeping rule 1: When completing cash accounts we:


Record money coming in on the left side and call it a DEBIT
Record money going out on the right side and call it a CREDIT
Our accounts are recorded in a T- Account style
Debit (+) this is anything we receive.
Credit (-) this is anything we pay out.
Let’s take a look at a basic cash book for a family for the week 01-08 of
March.
Debit: Money Coming In +
Date
01/03
06/03
08/03
Details
Wages
Child
Benefit
Wages
F Total
600
350
600
1050
09/03 Balance
B/D
Credit: Money Going Out Date
02/03
04/03
Details
Groceries
Esb
07/03
08/03
Mortgage
Balance C/D
F
Total
60
150
300
1040
1550
1040
Here you can see that all money received is on the debit side, and all
payments or money going out is on the credit side. The balance c/d
figure is the amount left over (closing cash for that time period). It is
calculated by subtracting the total in the debit column from the total in
the credit column and is then used to balance this account.
As you are familiar with from doing budgets, this closing cash (balance
c/d)will be the next month’s opening cash (balance b/d).
Now let’s attempt a simple T- Account question in our copies for the
Smith Family for the week 14th -21st of October 2013.
14/10 Cash on Hand €300 (Balance b/d from last month)
15/10 Received Wages €1200
16/10 Payed for Insurance €100
17/10 Payed Groceries €100
17/10 Child Benefit €150
18/10 Childcare €140
20/10 Wages 600
21/10 Car Repayments €550
*Remember to use appropriate headings and columns
Bookkeeping Rule 2:
Asset: Anything you own-e.g. your house
Liability: Anything you owe, e.g. mortgage payments
*Debit Assets, Credit Liabilities*
The Analysed Cash Book: How to prepare them
We have just completed an example of a simple cash account, now
we must move on to look at how we are going to complete the
Analysed Cash Books.
The analysed cash book is used to record all money received and all
money paid out by a household or business.
We still follow the simple rules of the cash accounts from above,
however this time we have to create actual accounts for each
transaction we make.
The date column is the date of the transaction
The details column is the description of transaction
The Receipt Number or Cheque Number will be given in the question if
relevant
The F column is for reference numbers
The bank/cash columns:
 Debit is money we received. All our debit
transactions go in the bank account
 Credit is money we pay out. All our credit
transactions go in the bank account and the
other account (e.g. bank €1100 and van €1100
from above).
*Note: (If there is a cash column, and the question states that we pay out by
cash rather than the bank, similar rules apply to the bank columns)
The remaining columns are our analysis columns. You will be asked in the
question to give these headings on the debit and credit side. These are used
to keep a record of all your transactions
Sample Analysed Cash Book 2011 Junior Cert Question and Solution.
We will work on this question in class.
N.B. Now please have a read of pages 38/39 of textbook for a talk through another
example of a cash account.
Bookkeeping Rule 3:
Contra Entries: These are entries that require us to make a debit entry and a
credit entry for the one transaction.
For example, if you walk up to an ATM and withdraw €20 from your bank
account, you would debit your own cash account (cause it to increase) as you
now have an increase of €20 and credit your bank account (this is paid out of
the bank) as it has now reduced by €20.
You would need to show this in a cash account using appropriate headings.
Can you give this a try using cash and bank headings on both the debit and
credit side?
Budgets Revisited: Actual v Difference
Now that your cash account is complete, you may be asked to compare your
actual figures with your budgeted figures and record the difference.
What you need to do in this example is examine the completed cash account
and then compare your actual figures with your budgeted figures and then
mark in the difference using + or – signs.
Please note that you are not being asked to create a budget in this instance
so will not need closing cash or opening cash or even complete total income
and expenditure columns.
Let’s look at wages as an example from our cash account above.
All our wages totalled up to be €2580, our budget was €3500, so this is a
difference of -920.
As you know, Actual- Budget = Difference.
In your copy, try and complete the table now using the 2011 question from
above.