Cover Image
close this bookBasic Accounting for Credit and Savings Schemes (Oxfam, 1996, 96 p.)
View the documentAcknowledgements
View the documentIntroduction
Open this folder and view contentsChapter 1: Getting started
Open this folder and view contentsChapter 2: Recording the transactions
Open this folder and view contentsChapter 3: Balancing the books
View the documentChapter 4: Sorting the data
Open this folder and view contentsChapter 5: The balance sheet
Open this folder and view contentsChapter 6: Administration of loans
Open this folder and view contentsChapter 7: Administration of savings
Open this folder and view contentsChapter 8: Sustainability
Open this folder and view contentsChapter 9: Stock
Open this folder and view contentsChapter 10: Checking the accounts
View the documentGlossary
View the documentFurther reading
View the documentAppendix 1: A worked example
View the documentAppendix 2 :Blank forms
View the documentOther books on financial management and income generation from Oxfam Publication
View the documentOxfam Publications

Glossary

Accounting period

The period of time covered by a financial report.



Administration charge

A charge for borrowing money. See also


'interest': in some cultures it is not appropriate


to use the term 'interest' for such a charge.

Analysed cash book

A cash book with separate columns to record


major categories of income and expenditure.

Assets

The things owned by an individual or


organization. For example, cash, money in a


bank account, or furniture.

Audit

An independent examination of and


expression of opinion on the books and


records of an enterprise.

Bad debt

A loan which cannot be recovered.

Balance

1 An amount remaining. For example, the


cash balance is the cash remaining in a cash


box; the balance of a loan is the amount of the


loan less repayments already made.


2 The bookkeeper balances the accounts by


agreeing the closing balance in the cash book


to the cash held in the cash box (the cash


count) and by agreeing the closing balance in


the bank book to the bank statement (the bank


reconciliation).



Balance brought forward

See 'opening balance'.

Balance carried forward

See 'closing balance'.



Balance Sheet

A list of the assets and liabilities of an


organization.

Bank book

The record of the transactions of an


organization with its bank.

Bank Statement

A report issued by the bank (usually monthly)


detailing its transactions on behalf of a


customer.

Bank reconciliation

An investigation of the difference (if any)


between the bank balance shown in the bank


book and the bank balance shown on the bank


statement.

Bookkeeper

The person responsible for maintaining


accounting records.

Budget

An estimate of the likely income and


expenditure of an organization for a specified


time period. A costed plan.



Budget and actual report

A comparison of budgeted income and expenditure


against actual income and expenditure for an


accounting period.



Capital

1 The original funding of a project or


organization.


2 Money advanced as a loan.

Capital expenditure

Expenditure on assets such as equipment,


furniture or vehicles.

Cash book

The record of the cash transactions of an


organization. Records all cash coming in and


going out.

Cash box

A lockable box in which cash is kept.

Cash count

Counting cash, usually to ensure the amount


held agrees with the balance shown in the


cash book.



Cashier

The person responsible for cash handling.

Creditor

A person or group who is entitled to receive


money from an organization.

Closing balance

The amount remaining at the end of an


accounting period. For example, the closing


balance in a cash book is the cash remaining at


the end of the accounting period. The closing


balance at the end of one accounting period


will be the opening balance at the start of the


next accounting period.

Debtor

A person or group who owes money to an


organization.

Deficit

If expenditure is greater than income in an


accounting period the organization has


incurred a deficit in that accounting period.

Division of duties

Arranging the accounting tasks so that no one


person is responsible for all the procedures.

Inflation

A measure of the increase in the general level


of prices.

Interest

1 A charge for borrowing money.


2 A payment for lending money.


(Usually calculated as a percentage of the


amount advanced.)

Invoice

A bill issued by a supplier to a customer.

Liabilities

Amounts owed by an individual or organi


sation to another individual or organization.


For example, a loan taken but not yet repaid or


goods received but not yet paid for.

Loan agreement

An agreement between a lender and a


borrower concerning the terms of the loan.


For example, the amount, the purpose of the


loan, the repayment schedule, and the


interest to be charged.



Loan register

A record of the transactions relating to a loan,


that is, details of the borrower, the amount


advanced, the purpose of the loan, the


repayment terms, the interest charged, and


the repayments made.



Management committee

The group of people responsible for managing a


project. (In this book, used to refer to the people


running a credit and savings scheme.)



Management information

Financial summaries and reports prepared for the


managers of an organization.



Net assets

The total assets of an organization when the


total liabilities have been paid. (Sometimes


referred to as the 'book value' of the


organization.)

Opening balance

The amount held at the start of an accounting


period. For example, the opening balance in


the cash book is the cash held at the start of the


accounting period. The opening balance at


the start of an accounting period should be the


same as the closing balance at the end of the


previous accounting period.

Passbook

A saver's record of his or her transactions


with the saving scheme or a customer's record


of his or her transactions with their bank.

Payment voucher

An internal document used to record the


details of a payment.

Profit and loss account

A schedule explaining how the surplus


generated or deficit incurred by a commercial


organization was achieved.

Receipts and

A summary of the income received and

payments report

payments made during an accounting period.

Receipt voucher

Document issued by someone receiving


money to the person from whom they receive


it.



Repayment plan

A plan for the timing and size of instalments


to repay a loan.

Revenue expenditure

Expenditure on running costs such as rent,


salaries, or fuel.

Savings card

A saver's record of his or her transactions


with the saving scheme. The savings card


should record all amounts deposited and


amounts withdrawn, and any interest paid to


the saver.

Stock

Items purchased for resale.

Stocktake

Checking the stock held in the store against


the stock records.

Surplus

If income is greater than expenditure in an


accounting period the organization has


generated a surplus in that accounting


period.



Treasurer

The member of the management committee


responsible for overseeing the financial


management of the project.

Variance

The difference between the budgeted amount


of an item of income or expenditure in an


accounting period and the actual amount.

Write-off

An adjustment made in the accounts to reflect


a reduction in the value of, or loss of, an asset.