Balance in the cashbook of Cisco Private Ltd as at 31/12/20 was £30,500. On the same date the balance as per the bank statement was £50,520.

On examining the bank statement and the cash book, the following difference were observed.

1. Cheque paid to Jimmy for goods purchased totalling £520 was posted in error as £540
2. Cheque totaling £ 7,000 had been paid into the bank on 31/12/20 but were not credited by the bank until 01/01/21
3. Bank charges amount to £600
4. A standing order to T Murray of £800 had been paid by the bank but not entered in the cashbook
5. Interest income amounting £13,000 collected by the bank did not appear in the cash book
6. Amounts paid to suppliers but not presented for payment to the bank amount to £15,400

Required

a) Revised cash book for 31/12/20 after taking into account above adjustments

b) Bank reconciliation statement as at 31/12/20

c) What is the amount that is posted to the balance sheet? Under what account name?

d) Briefly explain the importance of preparing bank reconciliation statement

Answer rating: 100% (QA)

Answer3a Adjusted Cash Book Date Particulars Am... View the full answer