HLC Business Studies Year 8 2nd Term 2024-2025 PDF

HONEYLAND COLLEGE, LAGOS Attracting children from Nations, Returning Leaders to the Nations. BUSINESS STUDIES YEAR 8 2ND TERM E-NOTES FOR BUSINESS STUDIES YEAR 8 2ND TERM...

HONEYLAND COLLEGE, LAGOS Attracting children from Nations, Returning Leaders to the Nations. BUSINESS STUDIES YEAR 8 2ND TERM E-NOTES FOR BUSINESS STUDIES YEAR 8 2ND TERM 2024/2025 ACADEMIC SESSION 0  TABLE OF CONTENT WEEKS CONTENT PAGE Scheme of work 3 1 Insurance 4 Types of insurance policy 4 Principles of insurance 5 Benefit of insurance 5 2. Personal Qualities of an Entrepreneur 6 Meaning of Entrepreneur and Entrepreneurial skills 6 Qualities of an Entrepreneur 6 3. Business Opportunities 7 Types of Business opportunities 7 Local/National business opportunities 7 International business opportunities 8 4. Consumer rights and responsibilities 9 Origin of consumerism 9 Universal rights of consumer 9 Responsibilities of consumer 10 5. Shopping Tips 11 Needs and Wants 11 Steps involved in making decisions about needs and wants 11 Impulse buying/Effects of impulse buying 12 After sale services 12 6. Book keeping ethics 13 Need for TAP 13 Attributes of TAP 13 1  Problems created by lack of TAP 14 Solutions to problems created by lack of TAP 14 7. MID TERM BREAK 8. Ledger Entries 15 Items on the ledger 15 How to record cash receipt and payment 15 Format of a Ledger 15 9. Petty cash book 16 Columns on a petty cash book 16 Importance of petty cash book 16 Imprest system 17 Format of a petty cash book 17 Illustration 17 10. Cash Book 18 Definition 18 Importance of cash book 18 Rules for posting in a cash book 18 Types of cash book 18 Single column cash book 18 Two column cash book 19 Contra entry 19 Balancing the cash book 19 Illustration 1 19 Illustration 2 20 2  Yr 8 Business Studies 2nd Term Scheme Of Work Week Topic Sub-Topic 1 Insurance Definition, Types {Vehicle, Fire, Burglary, Marine, Life assurance, Pension, Health}, Principles of insurance, Benefits of insurance. 2 Personal qualities of an Meaning, Personal qualities of an entrepreneur, motives of Entrepreneur an Entrepreneur. 3 Business Opportunities Meaning, Types {Local, National, International} 4 Consumer Right and Meaning of consumer right, Origin of consumerism, Eight Responsibilities universal consumer right, Consumer responsibilities. 5 Shopping Tips Meaning of needs and wants, Decision making, Impulse Buying, Effects of impulse buying, After sales services. 6 Book Keeping Ethics Meaning, Needs for TAP, Attributes of TAP, Problems created by lack of TAP, Solutions. 7 Mid-term Break Mid-Term Break 8 Ledger Entries Meaning, Classes of ledger, Items on the ledger, how to record cash received/payment 9 Petty Cash Book Meaning, Columns in a petty cash book, Imprest system, cash float, refinement, reimbursement, recording cash received/payment on the petty cash book. 10 Cash Book Meaning, Types, Preparation; {Single column, Two column} 11 Revision 12 Examination REFERENCE TEXTBOOK: Classic Business Studies for JSS2 by A. A. Arimomo et.al. 3 WEEK 1 INSURANCE Learning Objectives: At the end of the lesson, the students should be able to: (i) Define insurance (ii) List and explain about the types of insurance policy (iii) State the principles of insurance (iv) Mention the benefits of insurance Keywords: provision, occurrence, future losses, risk, unforeseen events Content: DEFINITION: Insurance can be defined as the provision a business man makes against the occurrence of some future losses. It can also be defined as a financial provision made to protect individuals and organizations against risks or losses which might be caused by unforeseen events. It is also a legal contract that protects people from the financial costs that result from loss of life, health, properties and lawsuits. This is usually done by entering into agreement with an insurance company and by paying a regular amount of money called premium. The insurance company is known as the insurer and the document which contains the terms of agreement is called the policy. TYPES OF RISKS Insurable risk: These are risks which insurance companies can make provision for because it is possible to collect, calculate and estimate the likely future loss. Examples are motor, life, marine insurance etc. Non-insurable risk: These are risks which insurance companies are not ready to insure against because the likely future losses cannot be easily estimated and calculated. Examples are profit or loss from competition, gambling, launching of a new product, risk due to war etc. TYPES OF INSURANCE POLICY 1. Vehicle insurance: This policy covers any damage or impact such as accidents, theft, robbery and other hazards on a vehicle. There are two main types of motor vehicle insurance; third party insurance and comprehensive motor vehicle insurance. a. Third party motor vehicle insurance: This insurance policy covers another person (the third party) whose vehicle has been damaged by the insured. b. Comprehensive motor vehicle insurance: This policy provides complete coverage for the insured and the third parties in case of any damage to a vehicle. 2. Fire insurance: This is a policy that covers losses and damages done to buildings, shops and stock of goods as a result of fire incidence. 3. Burglary insurance: This policy provides compensation for losses which may arise from goods and property stolen and damaged through breaking into a building or business premises by robbers. 4 4. Marine insurance: This is a policy that covers all losses and damages associated with ships and their cargos while on sea. It is the oldest type of insurance policy. 5. Life assurance: This is a policy that covers a specified event which may happen sooner or later such as death. It is a way of safeguarding the economic well-being of one’s dependent in the event of death. There are two types of life assurance: a. Endowment life assurance: This is a policy which provides for the sum assured to be paid either at a fixed number of years or at death depending on which one occurs first. b. Whole life assurance: This type of policy will last for the life time of the assured and the sum assured is payable to the beneficiary only at death of the assured. PRINCIPLES OF INSURANCE 1. Indemnity: This is the compensation given to the insured by the insurer in the event of suffering a loss. 2. Insurable interest: This is the principle which states that one can only insure properties that will bring loss upon destruction. The properties of friends or relatives cannot be insured by an individual. 3. Utmost good faith (uberrimae fidei): This principle states that in any insurance contract, all relevant information that will affect the validity of the agreement must be disclosed by the parties involved. 4. Contribution: This is the principle that states that where a person has insured a certain risk with many insurance companies, compensation cannot be claimed fully from each of the insurance companies. 5. Proximate cause: This is the principle that states that only the losses which arises from the direct and immediate cause of the event insured against are compensated. 6. Subrogation: This principle states that once the insured has been given compensation for loss, the insured cannot take over the property of the insurance and the right relating to it. BENEFITS OF INSURANCE 1. Insurance helps to reduce and control loss of a businessman. 2. Insurance provides a means of saving regularly for the future. 3. Insurance provides security to commercial activities. 4. Insurance helps in motivating workers. 5. Insurance as a business provides employment opportunities. 5 WEEK 2 PERSONAL QUALITIES OF AN ENTREPRENEUR Learning Objectives: At the end of the lesson, the students should be able to: (i) Define Entrepreneur and Entrepreneurial skills (ii) Highlight the personal qualities of an Entrepreneur Keywords: risk, establish, idea, create Content: Meaning: An entrepreneur is an individual who takes the risk to establish a business by providing the needed capital and organizing other factors of production. Entrepreneurial skill is the ability of an individual to explore an idea and create an enterprise {small or big} not only for personal gain but for social and economic development. It is the ability to have self-belief, boldness, tenacity, passion and empathy, ability to recognize abilities, visionary and ready to take expert advices desired for immediate result. PERSONAL QUALITIES OF AN ENTREPRENEUR 1. Successful entrepreneurs sets goals and put their skills and resources into achieving their goals. They are resourceful and problem solvers. 2. Successful entrepreneurs are focused on what will bring results. They are committed to their business. 3. They thrive on uncertainties. That is, they believe their ideas are possible even when they seem unattainable. 4. Entrepreneurs don’t quit at first, second or even hundredths obstacle. They continuously look for opportunities to improve and succeed. 5. They are willing to take risk. 6. They are willing to listen and learn. 7. They are visionary, passionate and always full of possibilities. 8. Entrepreneurs are action oriented. They don’t expect something from nothing and they don’t wait for things to happen. They are doers, they don’t procrastinate. 9. They are self-discipline. 10. They Network by meeting people. Not only to find clients but also to meet others who share their passion and desire and who can help them to go even further. 6 WEEK 3 BUSINESS OPPORTUNITIES Learning Objectives: At the end of the lesson, the students should be able to: (i) Definition Business opportunities (ii) List and explain the types of Business opportunities Keywords: chance, engage, production, rendering, livelihood Content: DEFINITION: Business opportunities refers to the chance an individual or organization has at a particular time within an environment to engage in production of goods or rendering of services in order to earn a means of livelihood. It involves sales or lease of any product, service, equipment, etc. that will enable the purchaser or licensee to begin a business. A business opportunity is a situation, package or investment in which someone can buy, lease or hire a product or service that allow them to begin a business. Example of business opportunities that typically offers extra support are: a. Buying franchise b. Distributorship/dealership c. Networking marketing Buying franchise: This involves having an opportunity to start one’s business from already set business. A franchise is an existing business with a solid business plan and process already in place. Distributorship/dealership: This business opportunity involves an agreement to sell a company’s product. A distributor/dealer is a person or business agent that has an agreement to sell products or services produced by a particular company. Types of business opportunities 1. Local business opportunity. 2. National business opportunity. 3. International business opportunity. Local business opportunity: Local business means a business that focus primarily on their area market and thus, is only limited to products and services for their targeted market area. It is a company which provides goods or services to a local population. Local business is one that is located in only one country and has few locations. The term may also be used to describe a franchise or corporate branch operating within a local area. Examples are: 1. Operating a barber’s shop or a unisex salon 2. Opening a bakery to provide bread and cakes 3. Providing day care services 4. Selling raw food items, such as garri, rice and beans National business opportunity: National business is one that is located in only one country but has many locations. Examples are: 1. Establishing a media house 2. Operating a bank or an insurance company 7  3. Setting up a construction company 4. Operating chain stores and franchise across the country. International business opportunities: International business comprises all commercial transactions {private & governmental} that takes place between two or more countries or nations beyond their political jurisdiction. Usually, private companies undertake such transactions for profit while governments undertake them for political reasons. The term ‘international businesses’ refers to all those business activities which involves cross border transactions of goods, services and resources between two or more nations. A multi-national enterprise (MNE) is a company that has a worldwide approach to markets and production or one with operations in several countries. Multinational enterprises can do business in different types of market. Well known MNEs includes 1. Fast food companies such as Mc Donald’s and Dominos. 2. Vehicle manufacturers such as General motors, Ford motor company and Toyota. 3. Consumer electronics producers like Samsung, LG and Sony 4. Energy companies such as Exxon Mobil, Shell and BP. 8 WEEK 4 CONSUMER RIGHTS AND RESPONSIBILTIES Learning Objectives: At the end of the lesson, the students should be able to: (i) Define Consumer rights and responsibilities (ii) State the origin of consumerism (iii) Enumerate the eight universal rights (iv) Highlight the specific responsibilities of consumer Keywords: buys, acquire, use, product, privilege, benefit, entitled, role Content: A consumer is a person or a group of people who buys and uses a product or services at a particular time. A consumer can also be defined as someone who acquires goods and services for direct use or ownership rather than resale or use for production and manufacturing. Consumer rights refers to a group of privileges or benefits which the consumers are entitled to. These rights are the good things the consumers have to enjoy. Consumer responsibilities refers to the role a consumer plays in the way that goods or services are provided and made available to public. It is the duty of the consumer to be aware of any changes which may affect the performance of a product. CONSUMER PROTECTION Consumer protection can be defined as the measures adopted by various organizations to guide consumers against unfair practices of producers and sellers. It is also a group of laws designed to ensure the rights of the consumers as well as fair trade competition and the free flow of truthful information in the market place. ORIGIN OF CONSUMERISM Consumerism is a movement by the consumers to obtain for themselves the greatest benefit from goods and services purchased for consumption. Consumerism was believed to have originated from the United States of America. The consumers at that time sensitized themselves about the need to unite and adopt non- violent means of protecting themselves from exploitation. EIGHT UNIVERSAL CONSUMER RIGHTS i. Right to safety: The consumers have the right to buy goods that will not be dangerous to their health. ii. Right to be heard: The consumers have the right to express their views. iii. Right to choose: Consumers have every right to choose the goods they want/need from the available alternatives, without being forced. iv. Right to seek redress: Consumers have the right to seek redress or correct any injustice from the seller/producer should the products be found injurious after consumption or usage as prescribed or directed. v. Right to be informed: Consumers have the right to be informed about the quality, price, expiring date etc. of the goods available for their consumption. 9 vi. Right to healthy environment: Consumers have the right to healthy environment in terms of neat production and market environment in order to ensure healthy products for consumption. vii. Right to get value for money: Consumers have the right to get or receive value for their money. i.e. consumers have the right to derive satisfaction that will be commensurate with the amount paid for goods and services. viii. Right to every good things of life: Consumer have the right to every products of life which modern technology can offer. RESPONSIBILITIES OF CONSUMERS These are the obligations expected of the consumers before, during and after buying or using products. Some of the specific responsibilities of consumers are; i. To check undue increase in prices of goods ii. To act as a guide against deceptive advertisement iii. To educate members about their rights. iv. To ensure goods are correctly used v. To be alert to changes in prices and qualities of goods vi. To read and follow the instructions or warnings regarding the product vii. To act as a check against exploitation of consumers by the manufacturer viii. Support for consumerism. 10 WEEK 5 SHOPPING TIPS Learning Objectives: At the end of the lesson the students should be able to: (i) Differentiate between Wants and Needs (ii) List and explain the steps involve in decision making about needs and wants (iii) Mention the types of After sales service Keywords: desires, essential, fundamental, basic necessities, selection, alternatives, arrangement, priority Content: WANTS Wants are the mere desires to own goods or services that gives satisfaction They are not essential for our existence. The wants of human beings can be tangible goods like cars, houses, furniture, electronics etc. and it can be intangible like barbing etc. Human wants are many or unlimited while the means needed to satisfy them are few or limited. NEEDS Needs are what people desire to have in life which are fundamental to their existence due to the fact that without the satisfaction of these needs, human beings cannot survive. Simply put, needs are the basic necessities of life. The basic needs are food, clothing and shelter. STEPS INVOLVE IN MAKING DECISION ABOUT NEEDS AND WANTS There are three main steps involved in making decision about needs and wants. These are: 1. Choice 2. Scale of preference 3. Opportunity cost CHOICE Human wants are many and the means to satisfy them are limited or scarce. As a result, there is need to make a choice. Choice can be defined as the rational selection of one thing out of numerous alternatives because of its relative importance to the person and scarcity of resources. Choice involves selecting or picking a product instead of another. SCALE OF PREFERENCE Since all our wants cannot be met at the same time, there is need for scale of preference. Scale of preference can be defined as the arrangement of the needs or wants in order of priority or relative importance. In this case, the most important want is at the top of the list while those needs that are of less importance could follow. OPPORTUNITY COST Opportunity cost refers to forgone alternatives as a result of making a choice. It is also called next best alternative or real cost. 11  IMPULSE BUYING An impulse buying is an unplanned decision to buy a product or service. One who tends to make such purchase is referred to as an impulse buyer. It was found out that emotion and feeling play a dangerous role in impulse buying. EFFECTS OF IMPULSE BUYING 1. Buying things, you do not need. 2. Spending money unwisely. 3. It affects the whole family economically. 4. It affects the savings habit of the consumer. AFTER SALES SERVICES After sales services refers to services a consumer is entitled to after purchasing a product from a producer or retail outlet. After sales services are usually for a short period. Examples of after sales services include: a. Guarantee: This is a commitment from the retailer orally or in writing to repair and take responsibility for any fault arising from the use of the item. b. Warranty: This is a written commitment by the manufacturer that the product has been tested and in good condition. It is a written assurance given by the manufacturer that the product will be replaced or repaired if anything goes wrong within a given period depending on the type of product. c. Installation: This is an aftersales service which involves putting a product or machinery or equipment in place for effective use. d. Delivery: This is an after sales service where the seller takes the responsibility upon his/her shoulder to carry goods sold to the premises of the buyer. 12  WEEK 6 BOOK KEEPING ETHICS Learning Objectives: At the end of the lesson, the students should be able to: (i) Define Book-keeping ethics (ii) State the needs for T.A.P. and Attributes of T.A.P. (iii) Highlight the problems created by lack of T.A.P. and suggest solutions Keywords: acceptable ways, plain, account, responsibility, moral principle Content: Book-keeping Ethics refers to the acceptable ways or mode of behavior for book-keepers. The following are book keeping ethics. T- Transparency A- Accountability P- Probity 1. Transparency: This can be seen as lack of hidden agenda or condition. It is the quality of being plain about one’s activities and revealing necessary details. Transparency means operating in such a way that it is easy for others to see what actions are performed when making financial reports. 2. Accountability: This is the readiness to account for all transactions that takes place during business operations. It also includes the responsibility for money or other entrusted property. 3. Probity: Probity means having strong moral principle, honesty and decency in doing the job. Probity involves integrity and a sound moral values in doing things. NEED FOR TAP There can be no meaningful development in a country where the principles of Transparency, Accountability and Probity {TAP} are abused or not inexistence because where there is no TAP, there will be no trust. The need for TAP includes: i. To be objective i.e. not being compromised in the ability to review records properly. ii. To carefully protect the financial information of an organization. iii. To show professional competency. iv. To prevent the collapse of business. v. It prevents fraudulent practices TAP has some attributes which include: 1. Honesty 2. Loyalty 3. Reliability 4. Respect for the rule of law 5. Hard work 6. Truthfulness 7. Openness 8. Fairness 13  9. Impartiality 10. Integrity PROBLEM CREATED BY LACK OF TAP 1. Embezzlement and mismanagement of funds. 2. Increase in bribery and corruption. 3. Denial of foreign aids and grants. 4.Blacklisting of individuals, organizations and the countries name thereby, tarnishing the image of the country. SOLUTIONS TO THE CHALLENGE CAUSED BY LACK OF TAP 1. Conducting internal and external auditing. 2. There must be frequent and constant stock taking and control. 3. Adequate internal controls and check. 4. Public and private organizations action must be brought to the open for public investigations and scrutiny. 5. There may be absolute respect for the rule of law. Every course of action and operations must be done by law. 14  WEEK 8 LEDGER ENTRIES Learning Objectives: At the end of the lesson, the students should be able to: (i) Define Ledger (ii) State the items on the ledger (iii) Illustrate the format of a ledger Keywords: Principal, main, permanently recorded, classified, summarized Content: DEFINITION: The ledger is the principal or main book of account where all business financial transactions are permanently recorded in a classified and summarized form. It is where all entries from the subsidiary books are posted to. The simplest form of a ledger account is divided vertically into equal halves. The left-hand side is the debit side, abbreviated ‘Dr’ and the right-hand side is the credit side abbreviated ‘Cr’. ITEMS ON THE LEDGER 1. Date column: This shows the date, month, and year different transaction takes place. 2. Particular column: This column is used for recording the description of transaction that takes place. 3. Folio column: This column is used as a reference purpose in which the page number of the subsidiary book or other account is recorded. 4. Discount: This is a reduction in the catalogue or invoice price of goods or articles offered or sold by the seller to the buyer. Examples of discount are: trade discount, quantity discount, seasonal discount and cash discount. 5. Amount: This indicates the total payment made on transactions. How To Record Cash Received/Payment Cash received: The account that receives value or cash is debited. The transaction is recorded on the debit side of the account. Cash payment: The account that pays value or give cash is credited. This means the transactions are recorded on the credit side. Discount received: This is the discount granted by creditors or suppliers to customers for payment. It serves as income to customers and it reduces the amount to be paid on goods purchased. Discount allowed: This is the reduction in the amount to be paid by debtors or customers for prompt settlement of account. Dr Cr Date Particulars Folio Amount Date Particulars Folio Amount # # Receiving Side Giving Side 15  WEEK 9 PETTY CASH BOOK Learning Objectives: At the end of the lesson, the students should be able to: (i) Define petty cash book (ii) Mention the importance of petty cash book (iii) Illustrate the format of a petty cash book Keywords: small, minor, expenses cash book Content: DEFINITION: Petty cash book is a cash book used for recording small or minor expenses to reduce the number of expenses posted to the main cash book. The office sets aside for minor or petty expenses is called cash office. Payment made by the petty cash cashier is supported by a petty cash voucher showing the reason for the payment and signed by the person receiving the money. Columns in a petty cash book The petty cash book has two sides, the debit and credit sides. The petty cash book has only one amount column on the debit side apart from date, folio, particular, voucher number. On the credit side, apart from the total amount column, the expenses column depends on the number of minor expenses undertaken by the organization. Recording of receipts and payments in a petty cash book The cash float or imprest received by the petty cashier is received on the debit side of the petty cash book. Whenever minor expenses are incurred, entries are made on the credit side and on the column appropriate to the nature of the expenses. IMPORTANCE/ADVANTAGES OF PETTY CASH BOOK 1. It helps organization to monitor expenses on small items and through that detects areas of wastage. 2. It allows the main cashier to attend to major routine business matters. 3. It is a time saving method. 4. It results in economic use of the ledger. IMPREST SYSTEM This is a method used in contributing the amount of money given to the petty cashier. A fixed amount called imprest is given to the petty cashier weekly or monthly to pay for small expenses. The process of giving petty cashier the actual amount spent on minor expenses to make up for the cash floats is known as imprest system. 1. Petty cash: This is the amount given to the petty cashier to be spent on minor or small expenses for a specific period of time. 2. Refinement: This is a system where the amount of cash float given to the petty cashier is slightly increased to cater for more minor expenses over a specific period of time. 3. Reimbursement: This is the system where the petty cashier is being refunded with the actual amount spent on minor expenses out of the imprest or cash float received. 16 Format of a petty cash book Dr Format of a petty cash book Analysis of Payment Cr Receipt Folio Date Particulars Voucher Numbers Total Transport Stationery Postage Refreshment Sundry Ledger Illustration 1: Prepare the petty cash book of Osuntuyi enterprises for the month of September 2022. The following were the petty expenses for the month. N :K Sept. 1 Cash float 2000:00 Sept. 2 Paid for office pins 40:00 Sept. 3 Bought envelops 20:00 Sept. 5 Bus fare 100:00 Sept. 6 Office tea 80:00 Sept. 7 Tin of milk 120:00 Sept. 10 Toilet soap 50:00 Sept. 12 Petrol 200:00 Sept. 13 Toilet soap 60:00 N.B. SOLUTION WILL BE DONE IN CLASS 17 WEEK 10 CASH BOOK Learning Objection: At the end of the lesson, the students should be able to: (i) Define Cash book (ii) State the importance of petty cash book (iii) Differentiate between Single or Double cash book Content: DEFINITION: The cash book is a book of account used to record all money or cash received and paid out within a period of time. The cash book is one of the most important books of account. A cash book is said to be a ledger account as well as a book of original entry. IMPORTANCE OF CASH BOOK 1. It is used for keeping records of all cash receipt. 2. It is used for keeping records of cash payment. 3. It is used to keep records of discount received and discount allowed. 4. It is used to ascertain or to estimate the balance of cash in hand and bank. RULES FOR POSTING IN A CASH BOOK 1. All cash and cheque received are recorded on the debit side. 2. All cash and cheque paid are recorded on the credit side. TYPES OF CASH BOOK There are three types of cash book. These are:  Single column cash book.  Two column cash book.  Three column cash book. SINGLE COLUMN CASH BOOK: Single column cash book is a cash account used for recording mainly cash receipt and cash payment. Cash book is divided into two halves, the left-hand side is the debit side abbreviated ‘Dr’ and the right-hand side is the credit side abbreviated ‘Cr’. Dr Cr Date Particulars Folio Amount Date Particulars Folio Amount # # Receipt Side Payment Side TWO COLUMN CASH BOOK: Two column cash book is the cash book where cash account and bank account are brought together into one page or book. The two columns are located on both debit and credit side. 18 There is an entry that affects the debit and credit sides of the two-column cash book at the same time. This type of entry involves the payment of cash into bank or withdrawal of cash from bank for official use. This type of transaction is called Contra Entry. It is usually denoted by ‘C’ in the folio column. Contra entry can be defined as the transfer of an item from one side of an account to the reverse side of another related account. Contra entry occurs when: 1. Cash or money is withdrawn from the bank for office use; or 2. Cash is taken from the office (business - cash till) and put into bank. A contra entry transaction must be entered two times in the same cashbook as follows: a. Cash is withdrawn from the bank. Debit cash (the ‘receiver’); and Credit bank (the ‘giver’). b. Cash paid into the bank. Debit bank (the ‘receiver’) and Credit cash (the ‘giver’) NOTE: You must write ‘C’ in the folio column to depict a contra entry. Dr Two column cash book Cr Date Particulars Folio Cash Bank Date Particulars Folio Cash Bank # # # # Receipt Side Payment Side BALANCING THE CASH BOOK 1. Add up the figures on the debit side of the cash book 2. Add up the figures on the credit side of the cash book 3. Determine the difference between the figures obtained in (1) and (2) above 4. On the side with the lower figure, write ‘balance c/d’ which is just the amount necessary to equalize the two totals 5. Bring down the ‘balance c/d’ to the next period as balance b/d 6. Write down the total of the credit and the total of the debit on the same line ILLUSTRATIONS SINGLE COLUMN Example: Write up the single column cash book of Boluwatife Enterprises from the transaction below and balance at the end of the month. N :K Jan 2 Started business with cash 15,000:00 Jan 3 Bought goods for cash 4,000:00 Jan 5 Cash sales 1,500:00 Jan 10 Paid for stationeries 500:00 Jan 15 Cash Purchases 1,000:00 Jan 16 Sold goods for cash 2,000:00 Jan 20 Received cash from John 1,200:00 Jan 28 Paid Salary 1,000:00 19 Jan 30 Paid Rent 200:00 ILLUSTRATION 2 DOUBLE COLUMN Example: Enter the following transactions in double column cash of Anuoluwa stores: N :K Feb 1 Started business with cash in hand 10,000:00 cash at bank 20,000:00 Feb 3 Bought goods by cheque 5,000:00 Feb 4 Cash sales 3,000:00 Feb 8 Received a cheque for goods sold 1,500:00 Feb 11 Paid cash into bank 1,000:00 Feb 20 Cash purchases 2,000:00 Feb 21 Paid electricity bill by cash 500:00 Feb 25 Paid rent by cheque 1,200:00 Feb 28 Paid Salary by cash 800:00 N.B. SOLUTION WILL BE DONE IN CLASS 20