1.4. Reconciliation and verification
A subsection of Accounting, 9706, through 1. Financial accounting (AS Level)
Listing 10 of 385 questions
Noor, a sole trader, prepares bank reconciliation statements at the end of each month. REQUIRED State four benefits to a business of preparing a bank reconciliation statement. State two differences between a bank standing order and a direct debit. Additional information On 31 October 2019 Noor received the following bank statement for her business account. Date Details Dr Cr Balance $ $ $ 1 Oct Balance b/d 292.22 Cr 3 Oct Credit 927.40 1 219.62 Cr 6 Oct Direct debit: P Ltd 334.80 884.82 Cr 7 Oct Cheque 626344 118.48 766.34 Cr 9 Oct Cheque 626346 723.21 43.13 Cr 18 Oct Credit transfer: Tahir 184.95 228.08 Cr 21 Oct Bank charges 59.60 168.48 Cr 22 Oct Direct debit: Ayesha 172.80 4.32 Dr 24 Oct Credit 841.67 837.35 Cr 27 Oct Cheque 626347 1 206.22 368.87 Dr 29 Oct Credit transfer: H Ltd 229.48 139.39 Dr Noor’s cash book (bank columns) for October 2019 was as follows. Cash Book (bank columns) $ $ Oct Oct Z Ltd (cheque 626344) 118.48 Balance b/d 292.22 J Ltd (cheque 626345) 276.93 Sales 927.40 Ayan (cheque 626346) 723.21 Tahir (credit transfer) 184.95 P Ltd (direct debit) 334.80 Sales 841.67 Huma (cheque 626347) 1206.22 Sales 773.25 Usman (cheque 626348) 985.33 Balance c/d 625.48 3644.97 3644.97 Nov 1 Balance b/d 625.48 REQUIRED Prepare Noor’s updated cash book. Cash Book (bank columns) $ $ Balance b/d 625.48 Prepare a bank reconciliation statement at 31 October 2019. Start with the balance per the bank statement. Bank reconciliation statement at 31 October 2019 $ Balance per bank statement
9706_w20_qp_21
THEORY
2020
Paper 2, Variant 1
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Simone operates a double entry system of book-keeping. REQUIRED Explain why a trial balance may be arithmetically correct even though errors have been identified. Additional information Simone extracted a trial balance before preparing the financial statements for the year ended 30 June 2020. The totals of the trial balance did not agree. The following errors were discovered. A total of $5600 from the sales returns journal had been credited to the purchases returns account. A motor vehicle costing $15 000, acquired on 1 March 2020, had been posted to the motor expenses account. Simone does not own any other vehicles. Discount received of $750 had not been posted to the discount received account. A payment of $300 for insurance had been entered correctly in the cash book. No other entry had been made. REQUIRED Prepare the journal entries to correct the errors. Narratives are not required. Simone General journal Dr $ Cr $ Additional information Simone’s policy is to depreciate motor vehicles at 25% using the straight-line method on a monthly basis. She prepared a draft income statement that showed a profit for the year of $47 835 before the correction of errors. REQUIRED Calculate the revised profit for the year after the correction of errors. State three uses of the general journal other than the correction of errors.
9706_w20_qp_23
THEORY
2020
Paper 2, Variant 3
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Martina has prepared the following sales ledger control account for the month of August 2021. All sales are on credit. Sales ledger control account for the month of August 2021 $ $ Balance b/d 14 280 Sales returns journal Sales journal 9 540 Bank 11 860 Discounts received Balance c/d 11 470 23 820 23 820 Balance b/d 11 470 Martina produced a list of all customer account balances at 31 August 2021 totalling $10 020. She discovered that the following errors had been made in the records. Discounts allowed of $1190 had been entered in customers’ accounts but had not been entered in the control account. A credit transfer from a customer of $420 had been correctly entered in the cash book but had been credited to the customer’s account as $240. A credit balance of $60 on a customer’s account had been recorded on the list of balances as a debit balance. A contra to the purchases ledger of $860 had been entered in the customer’s sales ledger account but had not been entered in the control account. A cheque received from a customer of $380 had been returned unpaid by the bank. No entries had been made in Martina’s books of account in respect of the unpaid cheque. Martina had sent a cheque for $20 to a customer who had overpaid his account. The payment had been correctly processed in both the cash book and the customer’s account but had been posted to the purchases ledger control account in error. REQUIRED Prepare an adjusted sales ledger control account. Sales ledger control account $ $ Balance b/d 11 470 Prepare an adjusted list of sales ledger balances to agree with the adjusted sales ledger control account balance in part . $ Original total of sales ledger balances 10 020 Adjusted total of sales ledger balances Explain how the preparation of a sales ledger control account assists in the prevention of fraud. State three types of error that will not be identified by preparing a sales ledger control account.
9706_w21_qp_21
THEORY
2021
Paper 2, Variant 1
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Shamal maintains a full set of accounting records. He has extracted a trial balance at 30 September 2021 that does not balance and he has opened a suspense account for the difference. Shamal has now identified the following six errors. There were no other errors. A payment of $169 for motor repairs had been correctly entered in the cash book but had been debited to the motor repairs account as $196. The purchase of new machinery, $670, had been debited to general expenses. Discount allowed of $175 had been entered correctly in the cash book but had not been posted to the discount allowed account. The sales journal was totalled at $86 961. The total should have been $86 741. A cheque for $425 received from McCann, a credit customer, had been correctly entered in the cash book but had been debited to the sales ledger control account. The total of the discount received column in the cash book, $490, had been entered twice on the correct side of the discount received account. REQUIRED Prepare the suspense account at 30 September 2021, clearly identifying the opening balance. Suspense Account Details $ Details $ Complete the table to name the type of error in each of the errors 1, 2 and 3 identified by Shamal. Error Type of error Explain two benefits to a business of preparing a purchases ledger control account. State two items that would appear on the credit side of a purchases ledger control account.
9706_w21_qp_22
THEORY
2021
Paper 2, Variant 2
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Questions Discovered
385