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FA – L1 – Q58 – Bank reconciliations

Prepare a bank reconciliation statement for Accra & Sons as at 31 Dec 20X9, identifying the cash at bank balance.

Question

While reconciling the bank statement with the cash/bank book of Accra & Sons for the year ended December 31, 20X9, you noted the following:

(i) Balance as per bank statement at December 31, 20X9, overdrawn: GH¢806,436
(ii) Cheques drawn but not presented till December 31, 20X9: GH¢377,784
(iii) Mark-up on overdraft charged by the bank on January 2, 20Y0 was recorded in the cash/bank book on December 31, 20X9: GH¢118,686
(iv) Collections made on December 30 and 31, 20X9 were not lodged with the bank till January 3, 20Y0: GH¢250,600
(v) A bill which was due on December 29, 20X9 was sent to the bank for collection on December 28, 20X9, and entered in the cash/bank book. However, the proceeds were credited by the bank on January 1, 20Y0: GH¢196,500
(vi) Subscription for a magazine was paid by the bank, as per the auto-debit instructions, on December 1, 20X9. This transaction has not been recorded in the cash/bank book so far: GH¢3,144
(vii) A time-barred cheque was replaced with a new cheque on December 30, 20X9 and entered in the cash/bank book without the previous cheque being cancelled / reversed. Both the cheques are included in (ii) above: GH¢5,000
(viii) A cheque received on December 21 was erroneously recorded on the credit side of the cash/bank book: GH¢7,500
(ix) A cheque issued to a supplier was time-barred as of January 2, 20Y0: GH¢13,200
(x) A cheque issued by the company has been entered in the credit column of the bank statement: GH¢13,200

Required:
Prepare a bank reconciliation statement as at December 31, 20X9 and identify the amount to be carried to the statement of financial position as “cash at bank”.

Answer

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Tags: Bank reconciliation, Cash book, Cheques, Errors, Financial Statements, Overdraft
Level: Level 1

Topic: Bank reconciliations

FA – L1 – Q57 – Bank reconciliations

Prepare a bank reconciliation for Newman & Co as at 31 August 20X9, correcting errors in the cash book and bank statement.

Question

Following information has been collected from the books of Newman & Co, as at August 31, 20X9:
(a) Balance as per bank book
(b) Cash balance on bank statement
(c) Cheques outstanding on August 31 were as follows:

Cheque No.	GH¢
670	13,353
679	14,152
690	17,108
996	3,535
997	14,430
999	23,629

(d) The company made the following payments into the bank in the last week in August but these had not yet appeared on the bank statement.

GH¢
83,250
144,641

(e) The following matters have been discovered.
(i) Receipt of GH¢15,000 was erroneously recorded on the credit side of the bank book.
(ii) A payment of GH¢12,480 was erroneously recorded on the debit side of the bank book.
(iii) The credit side of the bank book has been overcasted by GH¢4,800.
(iv) The bank statement showed an amount collected by the bank but not shown in the cash book in the amount of GH¢87,188.

Required
Prepare the bank reconciliation as at 31 August.

Answer

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Tags: Adjustments, Bank reconciliation, Bank statement, Cash book, Cheques, Errors, Financial accounting, Overdraft
Level: Level 1

Topic: Bank reconciliations

FA – L1 – Q56 – Bank reconciliations

Reconcile cash book with bank statement for Sandwell Ltd, adjust ledger for unrecorded items.

Question

A company, Sandwell Ltd, receives a bank statement. The balance on its cash book (= bank account in the main ledger) is a debit balance of GH₵1,600,000. In reconciling the cash book balance with the bank statement balance, the accountant discovers that the bank statement does not show cheques received from customers for GH₵8,200,000 and banked, or cheque payments to suppliers for GH₵4,700,000. The bank statement also shows bank charges of GH₵150,000, a direct debit payment of GH₵400,000, and a dishonoured cheque for GH₵300,000. None of these three items have yet been recorded in the ledger.

Required:

What is the balance on the bank statement?
What entries should be made in the company’s ledger accounts when the cash book and the bank statement balances have been reconciled?

Answer

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Tags: Adjustments, Bank charges, Bank reconciliation, Bank statement, Cash book, Direct Debit, Dishonoured Cheque, Errors, Financial accounting, Ledger Entries
Level: Level 1

Topic: Bank reconciliations

FA – L1 – Q53 – Control accounts and account reconciliations

Prepare a revised sales ledger control account for Biomed Supplies Ltd for 20X8, correcting identified errors.

Question

The sales ledger control account of BioHealth Solutions Ltd for the year ended 31st December 20X8 has been prepared from the following information:

	GH¢
Debit balance b/d 1st January 20X8	128,540
Credit balance b/d 1st January 20X8	2,800
Total for the year 1st January 20X8 to 31st December 20X8
Credit Sales	1,144,200
Cheques received from customers	1,046,200
Cash received from customers	7,100
Sales returns from customers	12,000
Discounts allowed	2,480
Dishonoured cheques	5,000
Contras purchases ledger	10,640
Irrecoverable debts	6,500

The sales ledger control account balance, which is part of the double entry system, failed to agree with the total receivables of GH¢189,380 as shown by the schedule of receivables. The following errors were subsequently discovered:

(i) A customer had returned goods to BioHealth Solutions Ltd at the selling price of GH¢2,400. The goods had been bought on credit. No entries had been made to record the return of the goods in the accounts of BioHealth Solutions Ltd.
(ii) The discounts allowed column in the cash book had been overcast by GH¢1,080.
(iii) No contra entry had been made in the receivables account in the sales ledger in respect of purchases by BioHealth Solutions Ltd of goods at a list price of GH¢2,000. PC Ltd received a trade discount of 10% on these goods. This transaction had been correctly dealt with in the Sales Ledger Control Account.
(iv) A credit sale of GH¢3,520 to JT Private Health Ltd was correctly recorded in the sales ledger control account, but no other entry had been made.
(v) A cheque received from a customer for GH¢6,900, correctly processed through the books, had subsequently been dishonoured. No entries have yet been made to record this dishonoured cheque.
(vi) DT Medical Ltd, a customer, has recently been declared bankrupt and the debt of GH¢3,500 is to be written off, but no entries have yet been made.

Required:
(a) Prepare a revised sales ledger control account for the year ended 31 December 20X8.

(b) Prepare a statement showing the correct total of the Schedule of Receivables for the year ended 31 December, 20X8.

Answer

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Tags: Advantages, Control Accounts, Errors, Financial accounting, Fraud Prevention, Payables, Receivables
Level: Level 1

Topic: Control accounts and account reconciliations

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FA – L1 – Q58 – Bank reconciliations

Prepare a bank reconciliation statement for Accra & Sons as at 31 Dec 20X9, identifying the cash at bank balance.

FA – L1 – Q57 – Bank reconciliations

Prepare a bank reconciliation for Newman & Co as at 31 August 20X9, correcting errors in the cash book and bank statement.

FA – L1 – Q56 – Bank reconciliations

Reconcile cash book with bank statement for Sandwell Ltd, adjust ledger for unrecorded items.

FA – L1 – Q53 – Control accounts and account reconciliations

Prepare a revised sales ledger control account for Biomed Supplies Ltd for 20X8, correcting identified errors.

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FA – L1 – Q58 – Bank reconciliations

Prepare a bank reconciliation statement for Accra & Sons as at 31 Dec 20X9, identifying the cash at bank balance.

You're reporting an error for "FA – L1 – Q58 – Bank reconciliations"

FA – L1 – Q57 – Bank reconciliations

Prepare a bank reconciliation for Newman & Co as at 31 August 20X9, correcting errors in the cash book and bank statement.

You're reporting an error for "FA – L1 – Q57 – Bank reconciliations"

FA – L1 – Q56 – Bank reconciliations

Reconcile cash book with bank statement for Sandwell Ltd, adjust ledger for unrecorded items.

You're reporting an error for "FA – L1 – Q56 – Bank reconciliations"

FA – L1 – Q53 – Control accounts and account reconciliations

Prepare a revised sales ledger control account for Biomed Supplies Ltd for 20X8, correcting identified errors.

You're reporting an error for "FA – L1 – Q53 – Control accounts and account reconciliations"

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