Required: As Ms. Harrison's accounting clerk, briefly EXPLAIN three (3) reasons why the closing balance in the
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Question:
Required:
As Ms. Harrison's accounting clerk, briefly EXPLAIN three (3) reasons why the closing balance in the cashbook is never usually the same as that reported in the bank statement. (Hint: The purposes of the bank reconciliation statement will help).
State four (4) possible reasons as to why the cheque from Michael Mane was dishonored by the bank.
What does the transaction called "credit transfer" as shown in the bank statement represent?
Draw up the updated cashbook, showing the necessary adjustments
Draw up the bank reconciliation statement for the month ended 31 December 2021
Anne Harrison's
Bank Account
Date | Details | Amts | Date | Details | Amts |
Dec 2 | Michael Mane | 7050 | Dec 1 | Balance b/d | 900 |
Dec 19 | Cash Sales | 1120 | Dec 21 | Pat Spoon | 7955 |
Dec 30 | Carlton Chang | 2910 | Dec 27 | Petty Cash | 789 |
Dec 31 | Balance c/d | 1784 | Dec 29 | Drawings | 2570 |
Dec 30 | Rent | 650 | |||
12,864 | 12,864 | ||||
Jan 1 | Balance b/d | 1784 |
The bank statement for the corresponding period was as follows:
Date | Details | DR | CR | Bal |
Dec 01 | Balance b/d | (900) | ||
Dec 03 | Cheque | 7050 | 6150 | |
Dec 04 | Returned Cheque- Michael Mane | 7050 | (900) | |
Dec 15 | Standing Order- Kowloon | 1500 | (2400) | |
Dec 18 | Direct Debit-Electricity | 700 | (3100) | |
Dec 21 | Deposit | 1120 | (1980) | |
Dec 23 | Cheque | 7955 | (9935) | |
Dec 23 | Credit Transfer- Dividends | 3220 | (6715) | |
Dec 28 | ATM Withdrawal | 789 | (7504) | |
Dec 31 | ABC Properties limited | 650 | (8154) | |
Dec 31 | Overdraft Interest | 18 | (8172) | |
Dec 31 | Closing Balance | (8172) |
Related Book For
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1133161646
7th Edition
Authors: Gary A. Porter, Curtis L. Norton
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