Junior Certificate Business Studies Cash Account First Years
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Introduction to Cash A/C for First Year Business Studies
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Junior Certificate Business Studies Cash Account First Years
- 1. The Cash Account The Cash Account (A/C) is used to record a household’s income and expenditure. Income is something earned – it is money coming into the household. E.g. Wages, salary etc. Expenditure is money going out of the house. E.g. Food, petrol, telephone & ESB bill. The left hand-side of a cash account is the debit side (Dr). On this side you put the income. Rule: Debit (Dr) the money you have and receive. The right hand-side of a cash account is the credit side (Cr). On this side you put the expenditure. Rule: Dr. Credit (Cr) the money you owe and pay out. Cash Account This is the debit side. Your put money you have and receive on this side (income). Cr. This is the credit side. You put money you owe and pay out on this side (expenditure). The Balance is the amount of money left over at the end of the month and available at the beginning of the next month.
- 2. Sample Question John and Mary Soap had the following transactions during the month of September. September 1st 2nd 4th 6th 9th 15th 18th 20th 22nd 26th 28th Details Cash in hand Mr. Soap received his wages They paid for groceries They paid for petrol They paid for meat at butcher’s Mrs. Soap received her wages They paid telephone bill They paid for groceries They went to cinema They paid ESB bill They serviced their car € 120 1300 350 140 60 1250 180 360 45 165 220 Answer Dr. Date Details Cash Account Cash Date Details € 1st Sept 2nd Sept 15th Sept Balance b/d Mr. Soap's wages Mrs. Soap's wages 1st Oct Balance b/d 120 4th Sept 1300 6th Sept 1250 9th Sept 18th Sept 20th Sept 22nd Sept 26th Sept 28th Sept 30th Sept 2670 1150 Cr. Cash € Groceries Petrol Butcher's Telephone Groceries Cinema ESB Car Service Balance c/d * 350 140 60 180 360 45 165 220 1150 2670 * To balance the account: 1. You add up the biggest side. (Dr. in this case = 2670). 2. You put the same total on the other side (Cr. Side in this case). 3. You add what's on the smaller side (Cr. side in this case) and you take it away from the total (2670 in this case). 4. This figure is your balance c/d at the end of the month (1150). 5. You put this figure (1150) on the other side at the beginning of the next month and it changes to balance b/d.