1.4. Reconciliation and verification
A subsection of Accounting, 9706, through 1. Financial accounting (AS Level)
Listing 10 of 385 questions
Examiner's Use The Netherdale Sports Club’s Receipts and Payments Account shows the following transactions for the year ended 30 April 2006. $ $ RECEIPTS PAYMENTS Balance b/d 20 000 National club fees 3 000 Subscriptions 72 000 Restaurant supplies 51 000 Restaurant takings 108 000 Purchase of clubhouse 50 000 Annual dance 8 900 Loan interest 2 200 Sale of equipment 6 000 Purchase of equipment 14 000 Loan to purchase clubhouse 20 000 Restaurant wages 22 000 Repairs and maintenance 12 400 Annual dance 4 950 Administration of annual dance Electricity 11 000 General wages 60 000 Balance c/d 4 030 234 900 234 900 Balance b/d 4 030 When the club’s bank statements for the year ended 30 April 2006 were studied, the following were discovered. Bank interest of $100 for the year had been credited in the bank statement but no entry appeared in the receipts and payments account. Electricity was paid by direct debit at $1000 per month but the entry for January 2006 had been omitted from the receipts and payments account. $4000 had been banked for restaurant takings on 30 April 2006. This had been entered in the receipts and payments account but did not appear on the bank statement. A cheque for $2800 for repairs and maintenance, posted on 29 April 2006, was included in the receipts and payments account but had not yet been presented to the bank for payment. For Examiner's Use REQUIRED Update the Netherdale Sports Club’s Receipts and Payments Account. Prepare a bank reconciliation statement at 30 April 2006 to reconcile the bank statement with the updated receipts and payments balance. For Examiner's Use Additional information: Net book value of the equipment owned on 1 May 2005 was $56 000 and the equipment sold during the year ended 30 April 2006 had a net book value of $4000. Depreciation on equipment is provided at 20 % reducing balance, with a full year’s depreciation written off in the year of purchase and none in the year of sale. The club’s other assets and liabilities were as follows: 1 May 2005 30 April 2006 $ $ Restaurant stock 7 600 9 400 Creditors for restaurant supplies 4 400 5 200 Subscriptions in arrears - 1 800 Subscriptions in advance 2 000 1 400 Fixtures and fittings 21 400 20 800 There were no purchases or sales of fixtures and fittings during the year. REQUIRED Prepare a Restaurant Trading Account for the year ended 30 April 2006. Depreciation, repairs and maintenance and electricity are not to be included in this account. For Examiner's Use Prepare an Income and Expenditure Account for the year ended 30 April 2006. For Examiner's Use State three reasons why, for most clubs, a Receipts and Payments Account is not always a satisfactory record of the club’s activities.
9706_s06_qp_2
THEORY
2006
Paper 2, Variant 0
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Questions Discovered
385