Question

- х Introduction to Financial Accounting (BBAC 1013) 2020 S2 (Exam paper).pdf - Adobe Acrobat Reader DC File Edit View Sign Window Help Home Tools Introduction to Fin... X Chapter 6 -Bank re... Extra exercise - Ban... Sign In 1 3/6 114% Search "Hide Text' Q2. Export PDF Adobe Export PDF Convert PDF Files to Word or Excel Online Select PDF File Successful Enterprise Sdn Bhd is preparing the bank reconciliation for the month of December 2019. The cash general ledger account on that date shows a balance of RM8,400 but different with the amount appear in the bank statement. Upon investigation, following reasons for discrepancies found: i. Cheques issued but remained unpresented totalled RM2,300 ii. A RM5,000 cheque deposited through cheque depository machine at the end of December had not appear in the bank statement. iii. The bank returned a customer's cheque for RM4,500 with remark “insufficient fund in account": iv. The bank statement showed RM30 interest earned during December. A payment to supplies for RM2,800 was erroneously recorded in our books as RM280. vi. Bank made a mistake by wrongly transferred an amount of RM400 into our account. Required: a) Update the cash book ledger as at 31 December 2019. (8 marks) Introductio... paper).pdf X Convert to Microsoft Word (.docx) V. Document Language: English (U.S.) Change Create, edit and sign PDF forms & agreements b) Prepare the bank reconciliation statement as at 31 December 2019 and determine the balance of bank statement. (8 marks) Start Free Trial Type here to search d ENG 8:56 AM 18/9/2020

Answer 1

a) The cash book will be updated in the following manner:

Particulars Beg. Bal. Interest Earned Total Ending bal. Cash Dr (RM) Particulars 8,400.00 Accounts Receivable 30.00 Accounts Payable 8,430.00 Total 1,410.00 Cr (RM) 4,500.00 2,520.00 7,020.00

b) Bank reconcialtion will be prepared in the following manner:

Book Balance Add: Bank Interest Earned Add: Customer payment error RM 8,400.00 30.00 Less: Customer Check Returned Less: Customer payment error -4,500.00 -2,520.00 Adjusted book balance 1,410.00

Workings

Checks and deposits outstanding with the bank at the end of the period are adjusted when bank reconciliation is prepared using the Bank Balance not when bank recon is prepared using general ledger balance.

When a customer cheque is returned, the company increases receivables again and reduces bank balance.

Interest earned during the period will increase interest income and bank balance.

Payment recorded was RM280 instead of RM2,800. The company will record the difference 2800-280 = RM 2520 and will decrease payable and decrease bank balance.

Error from the bank side will only be accounted for when bank recon is prepared using bank balance as the basis.

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