Answer: As a business advisor I do not agree with proprietor. Bank reconciliation is necessary to detect any discrepancies between account maintained by bank and cash book maintained by entity apart from those which are due normal timing differences. There are possibilities of errors or omissions which must be detected periodically so that necessary corrective actions can be taken well in time.
Answer (i):
Adjustment entries to cash book as follows:
Answer ii):
Answer (iii):
Three categories of differences identified in bank reconciliation are:
1. Items recorded in cash book, but not on the bank statement (timing differences)
Examples are Deposits in transit, Outstanding checks
2. Items on the bank statement, but not in cash book
Examples are Bank charges, Interest charges, Direct transfer to bank by customers, Collection of notes receivables by bank etc
3. Cash book errors or bank errors
Errors in recording like errors in recording amounts or errors in recording account title etc
QUESTION 5 Amankwah Enterprise has been in business for so many years and has developed a...
QUESTION 1 The following information relates to three posible capital expenditure projects. Because of capital rationing only one project can be accepted Initial Cost Expected Life Scrap Value Expected Expected Cash Inflows Ghc200,000.00 5 years Ghc 10,000.00 Ghe 80,000.00 70,000.00 65,000.00 60,000.00 55,000.00 Ghc230,000.00 Ghc180,000.00 5 years Ghc15,000.00 Ghc8,000.00 Ghc 55,000.00 65,000.00 95,000.00 100,000.00 Ghe 100,000.00 70,000.00 50,000.00 50,000.00 50,000.00 ear ear ear ear ear The company's estimated cost of capital is 18% Calculate a) b) c) d) The pay...
QUESTION 3 The Income Statement of Adom Enterprise for the year ended 31" March, 2020 as prepared by an Accounts Assistant indicated a net profit of GHS 148,080. Though, the cash book on 31" March, 2020 showed a balance at bank to be GHS 13,460. Your attention is however drawn to the following: Cheques from customers totalling GHS 14,940 which were recorded in the cash book on March 25, 2020 were not credited by the bank until April 2, 2020....
Accounting ii) QUESTION 3 The Income Statement of Adom Enterprise for the year ended 31" March, 2020 as prepared by an Accounts Assistant indicated a net profit of GHS 148,080. Though the cash book on 31 March, 2020 showed a balance at bank to be GHS 13.460. Your attention is however drawn to the following: i) Cheques from customers totalling GHS 14,940 which were recorded in the cash book on March 25, 2020 were not credited by the bank until...
Question 3 - Bank Reconciliation (15 marks) Jane Pandu received her bank statement for the month ended 31 December 2015 on January 2016. The bank statement showed a balance of N$11 788 (overdraft) as at 31 December 2015 while the cash book (bank account) showed a negative balance of N$ 20 770 (credit) as at the date. On examination of the cash book and the bank statement the following were discovered 1) A dishonored cheque of N$ 770 had been...
Question 3 The following information is available to reconcile Tariq Enterprise book balance of cash with its bank statement cash balance as of September 30. The September 30 cash balance according to the accounting records is RM78,356 and the bank statement cash balance for that date is RM83,525. a. The bank incorrectly cleared a RM480 cheque against the account in September that was not issued by Tariq. The cheque documentation included with the bank statement indicates the cheque was actually...
Question 3 H. Angula, for whom you work as a trainee accountant, has provided you with the following bank statement and bank account details in respect of the month ended 31 May 2017. STATEMENT OF ACCOUNT-YOUR BANK LTD Statement date-31 May 2017. Account No 7654321 Date Debit Credit Balance Particulars N$ N$ NS 27 970 Cr 26 720 Cr 7070 33 790 Cr 33 730 Cr 32 720 Cr 2 330 35 050 Cr 01-May-17 Balance forward 03-May-17 Cheque 596...
Hey everyone I am really stuck on this entire question and I was wondering if anyone could help thank you so much Task 5 20 marks The following information has been extracted from the records of Sing & Smile Ltd: RIGHT Bank Statement of Account As at: 31/12/18 Account Name: Sing & Smile Ltd Bank Statement Statement Page: 6 Date Transaction Debits Credits Balance Balance brought forward 21,011.00 Cr Dec 2 Deposit 1,240.00 22,251.00 Cr Cheque 732 115.00 22,136.00 Cr...
On 1 January 2021 Mr Lim started Mega Enterprise with the following:RMCash in bank6,800Premise90.000Equipment3,700Furniture & Fittings500 Mr Lim does not have a proper accounting record for the business. The following information is available as at 31 December 2021.RMCash in bank7,5060Premise90.000Equipment6,200Furniture & Fittings500Fixed Deposit5,000Stock11,780Debtor6,540Creditors3,602Accrued rent receivables800Accrued rates240Additional information:i) On 31 December 2020, Mr Lim bought a display rack for RM2,500 for business use using his personal savings. ii) Through the financial year ended 31 December 2021, Mr Lim took...
2 Clearwater Enterprise is a merchan Enterprise is a merchandising company which has business operations in Ipoh, The following balances have been extracted from the books as at 31 December 2016. Debit (RM) Credit (RM) Profic or Los 30,000 Income searr) 110,000 Balon shar 250,000 120.000 24,000 40,000 22,500 Machinery Accumulated depreciation - machinery Land LandD2TONE Building dsb rob tol no zivot 20 Accumulated depreciation - building Loan from Ah Ling (10 years) Bank overdraft Accounts receivable Inventories Sdn Accounts...
eeper of stealing. Here are some detalls of the business S Cash position at December 31, 2017 Additional Information a. The Cash account shows a balance of $10,430. This amount includes a December 31 deposit of $3,828 that does not appear on the December 31 bank statement. b. The December 31 bank statement shows a balance of $8,727. The bank statement lists a $270 bank collection, an $15 service charge, and a $52 NSF cheque. The bookkeeper has not recorded...