Question

Shah&Shah is a sole proprietorship and the cash book of Shah&Shah business showed a balance at the bank of 570 in hand on 31 August 2020. At the same date the bank statement balance of Shah&Shah account was 446 overdrawn. The difference was accounted for as follows. 1. Check for, 1555 sent to creditors on 30 August were not paid by the bank until 8 September. 2. Check amounting to 2520 paid into the bank on 31 August was not credited by the bank until 6 February. 3. A standing order for a charitable subscription of 60 had been paid by the bank on 21 August but no entry had been made in the cash book. 4. A check paid by Shah&Shah for rent on 21 August for345 had been entered in his cash book as 354.
1)Prepare Bank Reconciliation statement for Shah&Shah 2) Generally explain what factors differentiate Shah&Shah form partnership. 3) Explain different type of parties who are interested in Shah&Shah financial information also briefly summarize what will happen if Shah&Shah do not follow proper Accounting Principles.

Answer 1

Bank Reconciliation Statement preporation of samt part culars 'check of 2520 Balance as per past Book (446) (over drawn) Adjustements 1555 sent to creditors / (1555) were not paid by Bank b2 check of Rs 2520 paid in to Bark not credited c) & charitable Subscription of es to go paid by Bank but cash Book by & check paid buy for Rent for been entered is البول 60 no entry in 9 345 bis cash Book as 354 Balance as per Cash Book 570

that Shah Shah & 2 Factors differentiate sole proprietorship from Partnership 'Sole proprietorship partnership comes under Governed by Indian Specitic Act Partnership Act 1932 NO Encotpozatos voluntary ancorporat Required Decision making rest with proprietor only Decision needs to be mutually acceptable to All partners. A opision con cric and cause 06 Buisness diff of loss Scope of Raising capital is limited Scope of capital is relatively high

ام من IF principles shah & Shah will a) at cost effect Buisney Reputation b) No Trust can be placed on Financial statements prepared the accounts does not Represent leads to True and dail view it 9) Se prosecuton