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Mary Kelly uses an Analysed Cash Book to keep a record of her household accounts - Junior Cycle Business Studies - Question 5 - 2015

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Mary Kelly uses an Analysed Cash Book to keep a record of her household accounts. She has no bank account. (A) Prepare the Analysed Cash Book of Mary Kelly for the... show full transcript

Worked Solution & Example Answer:Mary Kelly uses an Analysed Cash Book to keep a record of her household accounts - Junior Cycle Business Studies - Question 5 - 2015

Step 1

Prepare the Analysed Cash Book of Mary Kelly for May 2015

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Answer

DateTransactionsAmount €
1 May 2015Opening Cash Balance750
4 May 2015Received monthly pension940
7 May 2015Paid for groceries175
9 May 2015Paid gas bill135
13 May 2015Paid charity donation10
15 May 2015Paid monthly house insurance bill30
15 May 2015Paid fuel bill145
20 May 2015Paid for groceries165
23 May 2015Paid hairdresser40
26 May 2015Paid monthly health insurance bill150
27 May 2015Paid butcher90
30 May 2015Lottery win50
31 May 2015Paid for groceries95

| June 1 | Balance | **€** |

Step 2

State three requirements that must be satisfied when opening a bank account.

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Answer

  1. Proof of address (e.g., utility bill)
  2. Proof of identity (e.g., passport, driving license)
  3. PPSN (Personal Public Service Number) to confirm identity.

Step 3

Outline two differences between a current account and a deposit account.

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Answer

  1. A current account may have an overdraft facility but only the amount in a deposit account can be withdrawn.
  2. Payments can be made by standing order/direct debit/credit transfer/cheques/debit cards from current accounts whereas funds from a deposit account can only be withdrawn.

Step 4

State and explain how her monthly pension would transfer into her bank account.

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Answer

Her pension is transferred directly into her bank account by her pension provider using an Electronic Funds Transfer.

Step 5

Explain three different methods Mary might use to pay each of these bills from her new bank account.

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Answer

  1. Gas:

    • Cheque: An instruction to the bank for specific payment.
    • Direct Debit: Allows the bank to automatically deduct variable payments.

  2. Monthly health insurance:

    • Standing Order: Setup fixed payments automatically from her account.
    • Direct Debit: Similar to a standing order with variable payments.

  3. Groceries:

    • Cheque: Written instruction for payment.
    • Debit Card: Pay directly from her account using her card.
    • ATM: Cash withdrawal to pay for groceries.

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