“Write the vision, and make it plain upon tables, that he may run that readeth it.” — Habakkuk 2:2
Lesson
What You Will Learn
- Set up a cash book with date, description, account, money in, money out, and balance columns
- Record transactions and keep an accurate running balance
- Total income and expenses by category
- Find and correct common recording errors
Lesson Notes
Setting Up the Cash Book
A cash book (or simple ledger) is a page where every transaction gets one line. Use these columns: Date | Description | Account | Money In | Money Out | Balance. Write in pen; if you make a mistake, draw one line through it, write the correction, and initial it. Never erase or use correction fluid. A visible correction is an honest correction.
Worked Example: Joy's March
Joy opens her business account with $500.00 of her own savings. (Joy is a composite example.)
- Mar 1 · Owner contribution (3000) · In $500.00 · Balance $500.00
- Mar 3 · Flour, sugar, butter (5000) · Out $86.40 · Balance $413.60
- Mar 5 · Birthday cake, Smith order (4000) · In $120.00 · Balance $533.60
- Mar 8 · Boxes and labels (5100) · Out $32.75 · Balance $500.85
- Mar 12 · Farmers market sales (4000) · In $245.00 · Balance $745.85
- Mar 12 · Market booth fee (6000) · Out $25.00 · Balance $720.85
- Mar 20 · Ingredients (5000) · Out $64.15 · Balance $656.70
- Mar 28 · Cupcake order (4000) · In $90.00 · Balance $746.70
Each new balance = previous balance + money in − money out.
Totaling and Checking
At month end, total each column and each category.
- Sales (4000): $120.00 + $245.00 + $90.00 = $455.00
- Ingredients (5000): $86.40 + $64.15 = $150.55
- Packaging (5100): $32.75 · Booth fees (6000): $25.00
- Total money out: $208.30
Check: starting $0.00 + owner contribution $500.00 + sales $455.00 − money out $208.30 = $746.70, which matches the last balance. If the check does not match, there is an error to find.
Common Errors
- Transposed digits: writing $63.00 as $36.00. If your difference divides evenly by 9, look for transposed digits.
- Wrong column: recording money out in the money-in column. The difference will be double the amount.
- Missed entries: a sale or fee never written down. Compare to receipts and the bank statement.
- Math slips: recheck each running balance. Use a calculator twice, or add the column a second way.
Key Terms
| Item | Details |
|---|---|
| Cash book | A ledger with one line per transaction and a running balance |
| Running balance | Previous balance + money in − money out |
| Transposition | Switching two digits, such as 63 and 36 |
| Audit trail | The visible record of entries and corrections |
In-Class Activities
Running Balance Drill
Starting balance $250.00. Record each line and keep a running balance: sale $80.00; supplies $42.50; sale $65.00; booth fee $20.00; owner draw $50.00; sale $112.25. Then total money in and money out and check your ending balance.
Find the Errors
The sample cash book has three errors: a transposed amount, an expense recorded in the money-in column, and a running balance added wrong. Find each one, correct it the honest way (single line, correction, initials), and write the correct ending balance.
Assignment: Two Weeks in the Cash Book
Mara makes and sells candles. (Mara is a composite example.) Her business account starts June 1 with $300.00. Record these in a cash book with a running balance and account numbers:
- Jun 2: wax and wicks, $72.40
- Jun 4: candle sales at a craft fair, $186.00
- Jun 4: craft fair table fee, $20.00
- Jun 7: glass jars, $48.90
- Jun 9: online order received, $54.00
- Jun 11: postage to ship the order, $11.35
- Jun 13: owner draw, $100.00
- Jun 14: gift shop order paid, $144.00
Then total sales, supplies, fees, postage, and owner draws, and prove your ending balance.
Graded with the Module Assignment Rubric.
Reflection Journal
Habakkuk was told to write the vision plainly so others could run with it. A clear cash book lets anyone see the truth. Where do you need to write things down plainly, in business or in life, so you can move forward?
Prayer focus: Ask God for patience with details and joy in faithful, careful work.
Weekly Reading & Devotions
Make It Plain
God told Habakkuk to write the vision and make it plain, so that whoever read it could run with it. A cash book is a plain record. One line per transaction. Date, description, account, money in, money out, balance. Anyone can read it and see the truth.
The running balance is the heart of the cash book. Each line answers the question, How much do I have right now? Previous balance plus money in minus money out. It is simple math, done faithfully, line after line.
Mistakes will happen. What matters is how you correct them. Draw one line through the error, write the correct amount, and initial it. Never erase, never cover it up. A visible correction says, I am honest even about my mistakes. That kind of record earns trust.
At the end of the month, total each category and check that your starting balance, plus money in, minus money out, equals your ending balance. When it matches, you can rest. When it does not, you know there is something to find, and you have the tools to find it.
Think About It
- How do you feel about visible corrections, in books and in life? ______________________
- What will help you keep your running balance accurate? ______________________
- When during the week will you update your cash book? ______________________
Daily Devotions for Week 3
Built by Wisdom
Through wisdom is an house builded; and by understanding it is established:— Proverbs 24:3 (KJV)
Businesses and homes are built line by line with wisdom and understanding.
Reflect: What are you building right now?
Pray: Lord, build my house with wisdom.
Do: Practice five running-balance lines.
Write It Plain
Write the vision, and make it plain upon tables, that he may run that readeth it.— Habakkuk 2:2 (KJV)
Plain records help everyone move forward, including you.
Reflect: What do you need to write down plainly?
Pray: Lord, give me clarity.
Do: Write your business vision in one sentence.
Small Things
For who hath despised the day of small things?— Zechariah 4:10 (KJV)
A single cash book page is a small beginning. God does not despise it.
Reflect: What small beginning can you celebrate?
Pray: Lord, thank You for small beginnings.
Do: Finish one full page of a practice cash book.
New Every Morning
It is of the LORD'S mercies that we are not consumed, because his compassions fail not. They are new every morning: great is thy faithfulness.— Lamentations 3:22–23 (KJV)
Every day is a fresh page. God's mercy covers our mistakes and lets us start again.
Reflect: What mistake do you need to release to God's mercy?
Pray: Lord, thank You for mercies that are new every morning.
Do: Correct one practice error the honest way.
Do Not Grow Weary
And let us not be weary in well doing: for in due season we shall reap, if we faint not.— Galatians 6:9 (KJV)
Record-keeping can feel tedious. Faithful repetition brings a harvest.
Reflect: Where are you tempted to give up?
Pray: Lord, keep me from growing weary.
Do: Spend fifteen minutes on your assignment before you feel ready.
Module Quiz
- 1.
A balance of $200.00, a sale of $75.00, and a supply purchase of $30.50 leave a balance of:
- 2.
The honest way to correct a cash book error is to:
- 3.
Your books are off by $27.00. This often means:
- 4.
Each new running balance equals the previous balance plus money in minus money out.
- 5.
List the six columns of a simple cash book.