Question Tag: Reconciliation

Search 500 + past questions and counting.

FA – Nov 2012 – L1 – SA – Q8 – Bank Reconciliation

Identifying the cause of discrepancy between the cash book and the bank statement.

Question

Which of the following does NOT cause a discrepancy between cash book and bank statement balances?

A. Direct credit found in the bank statement
B. Credit sales posted to the debit side of the cash book (bank column)
C. COT and other finance costs credited in the bank statement
D. The company’s credit balance in the bank statement
E. Subscription paid by the bank on behalf of the company’s manager and debited in the bank statement

Answer

Find Related Questions by Tags, levels, etc.

Tags: Bank Statement, Cash Book, Discrepancy, Reconciliation
Level: Level 1

Topic: Bank reconciliations
Series: NOV 2012

FA – Nov 2015 – L1 – SB – Q5c – Bank Reconciliation

Reconcile accounts receivable ledger control with ledger balances and clear the suspense account.

Question

The trial balance of Mbobo Limited includes the following items:

The following information is available:

The total of debit balances in the accounts receivable ledger is ₦116,374, and the total of credit balances is ₦1,234.
The accounts receivable ledger includes a debit balance of ₦700 for Entity C, and the accounts payable ledger includes a credit balance of ₦800 relating to Entity C. Only the net amount will eventually be paid.
Included in the credit balances in the accounts receivable ledger is a balance of ₦600 in the name of H. Potoka. This arose because a sales invoice for ₦600 had earlier been posted in error from the sales day book to the debit of the account of M. Potoka in the accounts payable ledger.
An allowance of ₦300 granted to a customer for some damaged goods had been omitted from the appropriate account in the accounts receivable ledger. This allowance had been included in the accounts receivable control account.
A cash receipt from a credit customer for ₦345 had been entered in the cash book as ₦245.
The bank balance of ₦1,700 had been included in the trial balance, in error, as an overdraft.
The debit balance on the insurance account in the nominal ledger of ₦3,456 has been included in the trial balance as ₦3,546.

Required:
(i) Prepare a reconciliation of the accounts receivable ledger control account and the accounts receivable ledger balances (8 marks).
(ii) Open a suspense account and post the entries required to clear this account (2 marks).

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accounts Receivable, Control Accounts, Reconciliation, Suspense account
Level: Level 1

Topic: Bank reconciliations
Series: NOV 2015

FA – Nov 2015 – L1 – SB – Q2 – Bank Reconciliation

Preparing an adjusted cash book and bank reconciliation for a club with discrepancies.

Question

a. Bank Statement is a mirror of any entity’s cash book, and they are expected to have equal balances at any point in time. However, this is not usually the case. Based on the ongoing statement, state five reasons that could cause the bank statement balance to differ from the cash book balance. (5 Marks)

b. The Treasurer of Young Star Social Club (YSSC) did not keep proper records for receipts and payments for the month of December 2014, causing mistrust among members. He has decided to seek your assistance to prepare a bank reconciliation statement before presenting the account to the club members.

The bank statement and the receipts and payments cash book of the club on December 31, 2014, showed a credit balance of N205,000 and N2,078,000, respectively. A comparison of the bank statement with the receipts and payment cash book of the club revealed the following:

i. Cheque drawn but not presented N3,160,000
ii. Amount lodged in the bank but not credited N725,000
iii. Entries in bank statement not recorded in receipts and payments cash book:

Standing order for loan refund N35,000
Interest received on deposit account N18,000
Bank charges N15,000
Cheque paid-in but returned with “refer to drawer” N120,000

Required:
i. Prepare an adjusted cash book as at December 31, 2014; (8 Marks)
ii. Prepare the Bank Reconciliation Statement showing the balance on December 31, 2014. (7 Marks)

(Total 20 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Adjustments, Bank Statement, Cash Book, Reconciliation
Level: Level 1

Topic: Bank reconciliations
Series: NOV 2015

FA – Nov 2022 – L1 – SB – Q1 – Bank Reconciliation

This question requires preparing an adjusted cash book, a bank reconciliation statement, and an explanation of why the reconciliation is necessary.

Question

On April 6, 2020, Alhaji Mogaji received his bank statements for the month ended March 31, 2020. The bank statement showed a balance of N41,740,000 (overdraft) as at March 31, while the cash book showed a balance of N52,599,000 (Credit) as at that date. On examination of the cash book and the bank statements, the following were discovered:

(i) Bank charges of N201,000 had not been recorded in the cash book;
(ii) Alhaji Mogaji exceeded his overdraft limit during the month of March. The bank had therefore charged him a default penalty of N250,000. This was not reflected in the cashbook;
(iii) A sum of N1,250,000 had been credited to Alhaji Mogaji’s bank account in error;
(iv) A cheque for N1,230,000 had been returned by the bank as dishonoured, and the bank charged Alhaji Mogaji N15,000. This was not reflected in the cash book;
(v) Cash receipts of N3,740,000 were posted as cash payments of N4,730,000 in the cash book;
(vi) On March 21, Alhaji Mogaji transferred cash of N650,000 to his personal bank account. This was credited to the business bank account in error by the bank;
(vii) Standing orders and direct debits of N1,115,000 had not been posted to the cash book;
(viii) Customers had transferred N2,170,000 directly to the bank account, and credit alert was received, but no record had been made in the cash book;
(ix) An amount of N5,120,000 lodged into the bank account on March 31, 2020, had not been credited by the bank;
(x) The following cheques, drawn on the bank account, had not been presented to the bank for payment as at March 31, 2020:
- Cheque No. 4528 dated March 11, 2020, N840,000
- Cheque No. 4535 dated March 28, 2020, N1,740,000
- Cheque No. 4537 dated March 31, 2020, N3,670,000.

You are required to:
a. Prepare the adjusted cash book for the month of March, 2020. (9 Marks)
b. Prepare a statement on March 31, 2020, reconciling the bank statement balance with the adjusted cash book balance. (7 Marks)
c. Explain two reasons for preparing a bank reconciliation statement on a regular basis. (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Book, Financial Adjustments, Financial Reporting, Overdraft, Reconciliation
Level: Level 1

Topic: Bank reconciliations
Series: NOV 2022

FA – May 2021 – L1 – SB – Q4 – Control Accounts

The question involves preparing control accounts and reconciling the balances with individual ledgers for payables and receivables.

Question

Wakanda is an African-focused company in the sales of super-tech wrist watches with corporate logos. The wrist watches are purchased and sold in bulk on credit. The accountant is currently carrying out a reconciliation of the payables and receivables ledger control account balances, which are ₦218,320,000 and ₦172,120,000, respectively, to the total of the balances on the individual accounts in the payables and receivables ledgers, which are ₦197,660,000 and ₦156,134,000 respectively for the month of March 2019.

The following has been detected:

(i) Cash received of ₦1,070,000 has been debited to the individual customer’s account in the accounts receivable ledger.

(ii) The total of discount received for the month, amounting to ₦17,150,000, has not been entered in the control account but has been entered in the individual ledger accounts.

(iii) A supplier credit balance of ₦2,050,000 has been incorrectly treated as a debit.

(iv) A cheque for ₦2,555,000 from a customer has been dishonoured. The correct double entry has been posted, but the individual accounts have not been updated.

(v) A petty cash payment to a supplier amounting to ₦630,000 has been correctly treated in the control account, but no entry has been made in the supplier’s individual ledger account.

(vi) A payment of ₦322,000 from a customer has been incorrectly entered in the accounts receivable ledger as ₦233,000.

(vii) The purchases daybook total for March has been undercast (understated) by ₦20,000,000.

(viii) Total credit sales of ₦4,500,000 to an accountancy firm, TQ and Associates, have been posted correctly to the ledger account but not recorded in the control account.

(ix) Contras (set-offs) with the receivables ledger, amounting in total to ₦20,040,000, have been correctly treated in the individual ledger accounts but no entry has been made in the control account.

(x) Discounts allowed totalling ₦120,000 have not been entered in the control account.

Required:

a) Prepare the Trade Payable Ledger Control Account and reconcile this to the sum total of the individual accounts in the Trade Payable Ledger. (10 Marks)

b) Prepare the Trade Receivable Ledger Control Account and reconcile this to the sum total of the individual accounts in the Trade Receivable Ledger. (10 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Control Accounts, Financial Statements, Payables, Receivables, Reconciliation
Level: Level 1

Topic: Control Accounts
Series: MAY 2021

FA – May 2017 – L1 – SA – Q20 – Bank Reconciliation

Defines a process that compares two sets of records.

Question

A process that compares TWO sets of records is
A. Reconciliation
B. Posting
C. Casting
D. Balancing
E. Absorption

Answer

Find Related Questions by Tags, levels, etc.

Tags: Balancing, Cash Flow, Posting, Reconciliation
Level: Level 1

Topic: Bank reconciliations
Series: MAY 2016

FA – May 2017 – L1 – SA – Q1 – Bank Reconciliation

Identifies why a bank reconciliation statement is prepared, focusing on error detection and reconciliation of differences.

Question

Which of the following justifies why bank reconciliation statement is prepared?

(i.) Detection of error in the organisation’s cash book

(ii.) Reconciliation of differences arising from delay in clearance of cheques

(iii.) Discourage embezzlement of fund by staff

(iv.) Resolve problems highlighted by the trial balance

A. (i), (ii), (iii) and (iv)
B. (ii)
C. (i) and (ii)
D. (ii), (iii) and (iv)
E. (i), (ii) and (iii)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Bank Reconciliation, Cash Book, Error Detection, Reconciliation
Level: Level 1

Topic: Bank reconciliations
Series: MAY 2017

FA – May 2024 – L1 – SB – Q3b – Control Accounts

Makes necessary adjustments in the receivables control account and reconciles the adjusted balance with the ledger accounts.

Question

b. Baba Enterprise’s receivables ledger control account on June 30, 2023, has a debit balance of ₦4,750,000, which did not agree with the net total of the list of receivables ledger balances as at that date. The following errors were discovered:

Sales returns of ₦175,000 by Uda have been recorded in Uda’s account in the receivables ledger but the transaction was not posted to the general ledger.
Credit sales of ₦200,000 to Chioma were not recorded in the control account but were recorded in the personal ledger of Chioma.
An item of goods sold to Abe, ₦312,500, had been entered once in the sales day book but posted to his account twice.
Baba Enterprise had expected Idowu to take advantage of a settlement discount of ₦32,750. Idowu did not settle the account on time to qualify for the discount. This has been recorded correctly in Idowu’s account but not entered in the general ledger.
A bad debt amounting to ₦500,000 had been written off in the receivables ledger but had not been posted to the bad debts expense account or entered in the control account.
Debit balances in the receivables ledger, amounting to ₦128,750, had been omitted from the list of balances.
Payment of ₦120,000 received from Kwali was posted to the cash book but not recorded in the control account.
Credit sales was overstated by ₦250,000 in the control account.
No entry had been made in the control account in respect of the transfer of a debit of ₦89,000 from Taju’s account in the receivables ledger to his account in the payables ledger.

Required:

i. Make the necessary adjustments in the receivables control account and bring down the adjusted balance. (10 Marks)

ii. Reconcile the adjusted balance with the total balance in the individual receivables ledger account. (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Ledger Balances, Receivables Control Account, Reconciliation
Level: Level 1

Topic: Control Accounts
Series: MAY 2024

FA – May 2024 – L1 – SB – Q3a – Control Accounts

Lists reasons for differences between a supplier's statement and the ledger account and explains how to identify and resolve these differences.

Question

a. List three possible reasons for differences between the supplier’s statement balance and the supplier’s account balance in the ledger and explain how these differences can be identified and resolved during the reconciliation process. (6 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Control Accounts, Ledger Account, Reconciliation, Supplier Statement
Level: Level 1

Topic: Control Accounts
Series: MAY 2024

MA – July 2023 – L2 – Q2a – Budgetary control

This question involves preparing a statement to reconcile the budgeted contribution with the actual contribution using marginal costing principles and detailed variance analysis.

Question

Bekwai manufactures and sells a single product. The company operates a standard marginal costing system and a just-in-time purchasing and production system. No inventory of raw materials or finished goods is held.

Details of the budget and actual data for the period are as follows:

Budget data:

Standard production cost per unit:
Direct material: 8kg @ GH¢10.80 per kg	86.40
Direct labour: 1.25 hours @ GH¢18.00 per hour	22.50
Variable overheads: 1.25 hours @ GH¢6.00 per hour	7.50

Standard selling price: GH¢180 per unit
Budgeted fixed production overheads: GH¢170,000
Budgeted production and sales: 10,000 units

Actual data:

Direct material: 74,000 kg @ GH¢11.20 per kg
Direct labour: 10,800 hours @ GH¢19.00 per hour
Variable overheads: GH¢70,000
Actual selling price: GH¢184 per unit
Actual fixed production overheads: GH¢168,000
Actual production and sales: 9,000 units

Required:
Using marginal costing principles, prepare a statement that reconciles the budgeted contribution and the actual contribution. (Your statement should show the variances in as much detail as possible).
(15 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Actual contribution, Budgeted contribution, Marginal Costing, Reconciliation, Variance Analysis
Level: Level 2

Topic: Budgetary control
Series: JULY 2023

FA – Nov 2012 – L1 – SA – Q8 – Bank Reconciliation

Identifying the cause of discrepancy between the cash book and the bank statement.

Question

Which of the following does NOT cause a discrepancy between cash book and bank statement balances?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Bank Statement, Cash Book, Discrepancy, Reconciliation
Level: Level 1

Topic: Bank reconciliations
Series: NOV 2012

FA – Nov 2015 – L1 – SB – Q5c – Bank Reconciliation

Reconcile accounts receivable ledger control with ledger balances and clear the suspense account.

Question

The trial balance of Mbobo Limited includes the following items:

The following information is available:

The total of debit balances in the accounts receivable ledger is ₦116,374, and the total of credit balances is ₦1,234.
The accounts receivable ledger includes a debit balance of ₦700 for Entity C, and the accounts payable ledger includes a credit balance of ₦800 relating to Entity C. Only the net amount will eventually be paid.
Included in the credit balances in the accounts receivable ledger is a balance of ₦600 in the name of H. Potoka. This arose because a sales invoice for ₦600 had earlier been posted in error from the sales day book to the debit of the account of M. Potoka in the accounts payable ledger.
An allowance of ₦300 granted to a customer for some damaged goods had been omitted from the appropriate account in the accounts receivable ledger. This allowance had been included in the accounts receivable control account.
A cash receipt from a credit customer for ₦345 had been entered in the cash book as ₦245.
The bank balance of ₦1,700 had been included in the trial balance, in error, as an overdraft.
The debit balance on the insurance account in the nominal ledger of ₦3,456 has been included in the trial balance as ₦3,546.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accounts Receivable, Control Accounts, Reconciliation, Suspense account
Level: Level 1

Topic: Bank reconciliations
Series: NOV 2015

FA – Nov 2015 – L1 – SB – Q2 – Bank Reconciliation

Preparing an adjusted cash book and bank reconciliation for a club with discrepancies.

Question

i. Cheque drawn but not presented N3,160,000
ii. Amount lodged in the bank but not credited N725,000
iii. Entries in bank statement not recorded in receipts and payments cash book:

Standing order for loan refund N35,000
Interest received on deposit account N18,000
Bank charges N15,000
Cheque paid-in but returned with “refer to drawer” N120,000

Required:
i. Prepare an adjusted cash book as at December 31, 2014; (8 Marks)
ii. Prepare the Bank Reconciliation Statement showing the balance on December 31, 2014. (7 Marks)

(Total 20 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Adjustments, Bank Statement, Cash Book, Reconciliation
Level: Level 1

Topic: Bank reconciliations
Series: NOV 2015

FA – Nov 2022 – L1 – SB – Q1 – Bank Reconciliation

This question requires preparing an adjusted cash book, a bank reconciliation statement, and an explanation of why the reconciliation is necessary.

Question

(i) Bank charges of N201,000 had not been recorded in the cash book;
(ii) Alhaji Mogaji exceeded his overdraft limit during the month of March. The bank had therefore charged him a default penalty of N250,000. This was not reflected in the cashbook;
(iii) A sum of N1,250,000 had been credited to Alhaji Mogaji’s bank account in error;
(iv) A cheque for N1,230,000 had been returned by the bank as dishonoured, and the bank charged Alhaji Mogaji N15,000. This was not reflected in the cash book;
(v) Cash receipts of N3,740,000 were posted as cash payments of N4,730,000 in the cash book;
(vi) On March 21, Alhaji Mogaji transferred cash of N650,000 to his personal bank account. This was credited to the business bank account in error by the bank;
(vii) Standing orders and direct debits of N1,115,000 had not been posted to the cash book;
(viii) Customers had transferred N2,170,000 directly to the bank account, and credit alert was received, but no record had been made in the cash book;
(ix) An amount of N5,120,000 lodged into the bank account on March 31, 2020, had not been credited by the bank;
(x) The following cheques, drawn on the bank account, had not been presented to the bank for payment as at March 31, 2020:
- Cheque No. 4528 dated March 11, 2020, N840,000
- Cheque No. 4535 dated March 28, 2020, N1,740,000
- Cheque No. 4537 dated March 31, 2020, N3,670,000.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Book, Financial Adjustments, Financial Reporting, Overdraft, Reconciliation
Level: Level 1

Topic: Bank reconciliations
Series: NOV 2022