Module-c community Based Financial Management

 Operation and Maintenance Management Manual 
Training Module - D 
Community Based Financial 
Management 
 
DEMEWOZ CONSULTANCY 
v
Current Liabilities 
Double Entry System 
General Administrative 
Expenses 
the Accounts Summary Form. 
Current Liabilities represent amounts due to third parties within one 
year. Examples of accounts falling under this classification are 
Accounts Payable, Accrued Expenses, Current Portion of Loans 
Payable and Interest Payable 
Means the recording of two fold effect of every transaction. 
General Administrative Expenses account is for all expenses not 
specifically identify ed for water production or distribution but is 
important in the operations of the water utility. This account may 
include office supplies, transportation expenses, representation 
expenses, and refreshments during meetings. 
This does not include expenses incurred that do not support the 
business of CBOs, such as contributions to a village party. These 
expenses are classified as ‘Non-Operating Expenses’. 
General Ledger 
Income 
Income Statement 
A General Ledger is a record of the movement of an account in the 
Balance Sheet and Income Statement. It contains additions and 
deductions and the balance of the account at any time. 
In common usage, “income” is often interchanged with “revenue”. In 
accounting, “income” refers to net income, where expenses have 
been deducted from revenues. 
The Income Statement is a financial report of the operations of the 
company over a period of time (like “For the Year Ending June 30, 
2006 EFY”). Normally, this is prepared at the end of the financial 
year of the company. It may also be prepared monthly, quarterly or 
as often as needed. It contains the total revenues earned and 
corresponding expenses incurred during the specified period. The 
resulting net income or loss goes into the Balance Sheet (Capital 
portion). 
Interest Expense 
Interest Payable 
Interest Expense is the cost of borrowed money or a loan. In the 
Income Statement, this amount should be the cost of borrowed 
money corresponding to the reporting period of the income 
statement. It is not necessarily the actual amount paid, which may be 
less or more than the amount due for the period. 
Interest Payable represents the amount of interest due and unpaid 
as of the Balance Sheet date. This is entered as a Current Liabilities 

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Ministry of Water, Irrigation and Electricity