3.3. Bank reconciliation
A subsection of Accounting, 7707, through 3. Verification of accounting records
Listing 10 of 28 questions
Jenny runs a small trading business. Jenny received her bank statement which showed a credit balance of $1367 on 29 February 2024. On the same date her bank column in her cash book showed an overdrawn balance of $1933. When comparing her bank statement and cash book she found that the following items appeared on her bank statement and not in her cash book: February $ M Stores, a credit customer, had paid by bank transfer 1 900 Interest received A cheque previously received from C Stores had been dishonoured 1 121 Bank charges A direct debit for electricity had been taken The following items appeared in her cash book but not on her bank statement February $ A cheque paid to B Properties 1 025 A payment by credit transfer to pay for rent and insurance 2 300 A cheque received from a credit customer Y Traders was paid into the bank Upon investigation, she discovered the following error: A cheque made payable to D Sports $45 had been recorded in the bank column of her cash book. The cheque had been written from her personal account to pay for her gym membership. REQUIRED: Update the bank column of Jenny’s cash book. Balance the account and bring down the balance on 1 March 2024. Jenny Cash book – bank columns Date Details $ Date Details $ Prepare a bank reconciliation statement at 29 February 2024. Start with the balance from Jenny’s bank statement. Jenny Bank reconciliation at 29 February 2024 $ $ Suggest two advantages of preparing a bank reconciliation statement. Explain why a bank overdraft is shown as a debit balance on a bank statement. Jenny is concerned about her bank overdraft and is considering adding additional capital into the business from her personal funds. REQUIRED: Advise Jenny whether she should contribute additional capital to pay off her bank overdraft. Justify your answer.
7707_w24_qp_23
THEORY
2024
Paper 2, Variant 3
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Peter is a trader. The following transactions took place in April 2022. April Cash sales, $410, were paid directly into the bank account Paid $798 to Rahat, by cheque, in full settlement of a debt of $840 Paid $42 cash for a motor vehicle repair Purchased goods, list price $320, on credit subject to a trade discount of 10%, from Rahat Cash sales, $460 Paid $392 to Samir by telephone transfer, having deducted 2% cash discount from the amount due A cheque for commission receivable, $115, was paid into the bank account Paid $285 to Rafael by cash, in full settlement of a debt of $300 REQUIRED Prepare Peter’s cash book on the page opposite. Balance the cash book and bring down the balances on 1 May 2022. Peter has received a bank statement for April. He is using it to prepare a bank reconciliation statement and to update his cash book. REQUIRED Place a tick (✓) to show how each item in the table below would be used to prepare the bank reconciliation statement or to update the cash book. Prepare bank reconciliation statement Update cash book Items to be adjusted Added to bank statement balance Deducted from bank statement balance Debited to cash book Credited to cash book Bank charges Direct debit for rent Cheque paid to a supplier but not yet cashed Cheque for commission received dishonoured Dividend received REQUIRED Prepare the account for Rahat as it would appear in the ledger of Peter. Balance the account and bring down the balance on 1 May 2022. Peter Rahat account Date Details $ Date Apr 1 Details Balance b/d $
7707_s22_qp_22
THEORY
2022
Paper 2, Variant 2
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Questions Discovered
28