B.D2 Produce a comprehensive comparison of income and expenditure, as a graph or chart, over a set period of time.

Unit B11: Recording Income and Expenditure 

Level: 1
Unit type: Sector Business)
Guided learning hours: 40

Unit in brief
Learners will record and compare income and expenditure manually or using spreadsheet software.

Unit introduction
It is vital that businesses keep track of the money coming in and the money that is used to pay for expenses. It is important that businesses monitor their income and expenditure by keeping clear and accurate records so that they can make sure that the business is not spending more than it is getting in.

In this unit, you will learn how well the business is doing by recording the income and expenditure. Some smaller businesses do this on paper, manually, while others use spreadsheet software to record the income and expenses of a business. Spreadsheet software can do all the mathematical calculations for you and all you have to do is keep good records. You can also make charts using the software to compare the income and expenses for each month throughout the year.

The transferable and sector skills you develop in this unit can enable you to progress to further learning. They will also support you in completing the core skills units in Group A of the qualification.

Learning aims
In this unit you will:
A  Record income and expenditure of a business for a set period of time
B  Compare income and expenditure of a business for a set period of time.

Unit content
Knowledge and sector skills

Types of income and expenditure in a business

• Income, which can also be called revenue, is what a business receives on a daily or monthly basis and includes sales revenue, rent received, interest received.
• Expenditure is what a business pays out on a daily, monthly or annual basis. It includes rent on property, telephone, electricity, wages, salaries, repairs, fuel, advertising, buying stock (inventory), e.g. shoes for a shoe shop. Explanations of each type of expenditure must be covered.

Recording income and expenditure

• Calculating income and expenditure manually by placing the appropriate expenditure and income into columns and calculating the differences for each month for a set period of time.
• Manually creating a chart to graphically represent the differences in the income and expenditure over a set period of time.
• Using spreadsheet software to input income and expenditure.
• Enhancing headings for columns and rows using different font styles and sizes.
• Creating simple borders to enhance the appearance of a table in a spreadsheet to make it easier to read.
• Using IT to calculate, using formulae to obtain totals of income and expenditure and calculate profit and loss, including sum, minus {+, −, =SUM(cell:cell)}.Using IT to create charts and graphs, e.g. column chart, bar chart, single line graph to represent income and expenditure over a set period of time.

Comparing income and expenditure for a set period of time

• Expenditure that could be cut back.
• Income that could be generated.

Transferable skills

• Managing information: identifying and recording income and expenditure.
• Presenting information: organising and representing income and expenditure of a business in different ways, e.g. as a table and as a chart.