Chapter 16- Analysed Cashbook

Question 1

Cashbook

Answer 1

Is used to record all money actually received and spent

Question 2

T Account : What side is DR/CR

Answer 2

• The left side is the debit side

- The right side is the credit side

Question 3

Debit side (DR):

Answer 3

Used to record anything received E.G. wages

We say “debit the account”

Question 4

Credit side (CR)

Answer 4

Used to record anything given/ spent E.G. pay for groceries

We say “credit the account”

Question 5

Balancing an account

Answer 5

Means that we are calculating the difference between money received and money spent

Question 6

Balance c/d

Answer 6

Our closing balance on the account (c/d= carried down)

Question 7

Balance b/d

Answer 7

Brought down as the opening balance for the next month (b/d= brought down)

Question 8

Steps to balancing an account

Answer 8

Step 1: find bigger side
Step 2: find balance
Step 3: make both sides equal
Step 4 bring balance back to bigger side

Question 9

Contra entry:

Answer 9

Occurs when a transaction happens that requires us to make a debit entry and a credit entry
E.g. Withdrawal of cash from ATM (Dr- cash in wallet / Cr- money deducted from bank)

Question 10

Reasons to prepare and ACB:

Answer 10

• Record income and expenditure
• Compare record to budget, ensure you’re on track
• See where you may be overspending
• To compare with bank statement to ensure mistakes are noticed