I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

PART E: PREPARING A TRIAL BALANCE 

 

268

 

ANSWER 

A  

 

 

 

 

 

$   

 

$     

Balance per cash book 

 

 

(610) 

Items on statement, not in cash book 

 

 

 Direct 

debits 

 

(715) 

 

 Investment 

income 

 

353 

  

 

 

    (362) 

Corrected balance per cash book 

 

 (972) 

Item in cash book, not on statement 

 

 

 Customer's 

cheque 

 

    (875) 

 

Balance per bank statement 

 

 (1,847) 

As the balance is overdrawn, this is a debit on the bank statement.  

 

QUESTION 

Bank balance

 

Given the facts in the question above, what is the figure for the bank balance to be reported in the final 

accounts? 

A $1,847 

credit 

B $972 

credit 

C $972 

debit 

D $1,847 

debit 

ANSWER 

B 

The figure to go in the statement of financial position is the corrected cash book figure. This is 

 

$972 credit (or overdrawn). So the bank figure will appear in liabilities.  

 

3.2 Example: more complicated bank reconciliation 

On 30 June 20X0, Cook's cash book showed that he had an overdraft of $300 on his current account  

at the bank. A bank statement as at the end of June 20X0 showed that Cook was in credit with the bank  

by $65. 

On checking the cash book with the bank statement you find the following. 

(a) 

Cheques drawn, amounting to $500, had been entered in the cash book but had not been 

presented. 

(b) 

Cheques received, amounting to $400, had been entered in the cash book, but had not been 

credited by the bank. 

(c) 

On instructions from Cook the bank had transferred interest received on his deposit account 

amounting to $60 to his current account, recording the transfer on 5 July 20X0. However, this 

amount had been credited in the cash book as on 30 June 20X0. 

(d) 

Bank charges of $35 shown in the bank statement had not been entered in the cash book. 

(e) 

The payments side of the cash book had been undercast by $10. 

(f) 

Dividends received amounting to $200 had been paid direct to the bank and not entered in the  

cash book. 

(g) 

A cheque for $50 drawn on deposit account had been shown in the cash book as drawn on  

current account. 

(h) 

A cheque issued to Jones for $25 was replaced when out of date. It was entered again in the cash 

book, no other entry being made. Both cheques were included in the total of unpresented cheques 

shown above. 

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CHAPTER 15  

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  BANK RECONCILIATIONS