3. Verification of accounting records
A section of Accounting, 7707
Listing 10 of 107 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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Questions Discovered
107