Money in, money out: check a simple cash log
Trace six fictional money movements from an opening balance to a closing balance, then check a correction yourself.
Updated
A total is easier to check when you can trace it to the rows. Start with the money already there, add what came in, and subtract what went out. You should be able to explain the result without pointing only to a spreadsheet formula.
Your outcome: given an opening balance and six recorded movements, calculate the closing balance and explain which movements belong in it.
You need basic addition and subtraction, plus paper or a calculator. If you use Excel, you only need to be comfortable entering values. You can complete this whole exercise on the page without downloading anything.
Give the total a clear boundary
This is a made-up cash log for one demonstration account, covering 1–6 September 2026. All amounts are in Philippine pesos, shown as PHP. It contains no real people, business records or bank details.
The opening balance is PHP 10,000, measured before the first movement on 1 September. The question is: how much should remain in this account after the six listed movements?
That boundary matters. A payment made entirely from a different account, without money entering or leaving this one, would not belong in this log. Money transferred into this account would belong. A payment expected next week would not be money received during this period. Decide what the total describes before you start adding.
Read the six movements
Each row represents one completed money movement. Amounts are positive; the direction tells you whether to add or subtract them.
| ID | Date | Description | Direction | Amount (PHP) |
|---|---|---|---|---|
| T01 | 1 Sep | Payment received A | In | 6,000 |
| T02 | 2 Sep | Supplies paid | Out | 2,500 |
| T03 | 3 Sep | Service paid | Out | 1,200 |
| T04 | 4 Sep | Payment received B | In | 3,000 |
| T05 | 5 Sep | Delivery paid | Out | 800 |
| T06 | 6 Sep | Equipment paid | Out | 1,500 |
First, separate the two incoming amounts from the four outgoing amounts. This makes it easier to catch a row placed on the wrong side.
Money received: 6,000 + 3,000 = PHP 9,000.
Money paid: 2,500 + 1,200 + 800 + 1,500 = PHP 6,000.
The net movement is 9,000 − 6,000 = PHP 3,000. Net movement means how much the balance changed during the period. It is not the amount already in the account at the start.
Now include the opening balance:
PHP 10,000 + PHP 9,000 − PHP 6,000 = PHP 13,000.
The calculated closing balance is PHP 13,000.
Compare against a separate balance
For this exercise, a separate fictional balance note says:
Balance after the last movement on 6 September 2026: PHP 13,000.
Subtract that comparison balance from your calculated closing balance. Here, 13,000 − 13,000 = PHP 0. The two amounts agree.
This comparison is called reconciliation. It gives you another way to inspect the result, but a zero difference does not prove that every row is correct. Two mistakes could cancel each other, or both records could contain the same mistake. The note is part of this invented exercise; it is not a real bank check.
If the amounts disagree, inspect the period, opening balance, missing or repeated rows, directions and amounts. Changing a total until it matches would hide the reason for the difference.
Try two changes before reading the answer
Keep the same account and closing point. Change only the details below.
- Another PHP 4,000 is expected on 7 September. It has not arrived. What changes in the recorded closing balance for 6 September?
- You discover that T03 was entered incorrectly. The completed service payment was PHP 1,500, not PHP 1,200. Correct that existing row. What are the revised money-paid total and closing balance?
Write the two answers and one sentence explaining each. Also predict whether the old comparison balance of PHP 13,000 will still match after the correction.
Check your reasoning
The expected PHP 4,000 changes nothing in the recorded 6 September balance. It remains an expectation, separate from completed movements. If it arrives later, record it in the appropriate later period.
Correcting T03 increases money paid by PHP 300. The revised payment total is PHP 6,300, and the revised closing balance is 10,000 + 9,000 − 6,300 = PHP 12,700.
The old comparison balance now differs by PHP 300. Under our calculation-minus-comparison convention, the difference is 12,700 − 13,000 = −PHP 300. Investigate the underlying records. Do not silently rewrite the separate balance note simply to make the check pass.
Use the example within its limits
This small cash log describes recorded money movements for one account and period. It does not calculate profit, tax, payroll or future cash needs. Correct arithmetic also cannot confirm that an invented or incomplete input is true.
You can inspect the related Excel cash-log project for its sample scope, instructions and current verification details. Before using any spreadsheet result, try explaining the opening balance, incoming rows and outgoing rows in your own words. That explanation is a useful check alongside the total.
Put the idea to work with a small example.
Explore the Excel sample