Fa 2 Financial

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Topic-Wise Past papers
June ‘04 To December ‘08

Maintaining Financial Records [INT]


Bank Reconciliation Statement

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CAT-T3 Bank Reconciliation Statements 1
Wilson is preparing his bank reconciliation at 31 May 2005. His bank statement shows a balance of $228 cash at the bank. The balance on the bank account in his general ledger is $113 (credit). He has noted the following reasons for the difference: (i) Cheque number 958602 was incorrectly recorded in Wilson’s cash book as $760. The cheque was correctly debited on the bank statement on 2 May as $670. (ii) Bank charges of $428 were debited by the
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The debit balance on the bank account in his general ledger is $2,717. The bank statement for his business bank account shows that he has $44 at the bank. You have noted the following: (i) Due to an addition error, Jeremy overstated the total of cash banked by $900. (ii) Jeremy recorded the value of a cheque paid to a supplier as $540. The cheque was debited on the bank statement at the correct value of $450. Jeremy did not record interest earned of $120, or bank charges of $265. Both of these items are shown on the bank statement for November. During November, a lodgement of $4,000 to Jeremy’s personal account was credited to his business account by the bank. A customer’s cheque for $464 was returned as the customer did not have sufficient funds for payment. Jeremy has not made any entries in his books for the return of the cheque. A lodgement for $7,785 was not credited by the bank until 1 December. Jeremy recorded this lodgement in November. Cheques issued, with a total value of $2,531, have not been debited by the bank. This includes a cheque for $427 which was cancelled. Jeremy has not made any entries in his books to record the cancellation of the cheque.


(iv) (v)



Required: (i) Show the bank account in Jeremy’s general ledger, including any adjusting entries which are required by the information in (i) to (vii) above; Note: you MUST present your answer in a format which clearly indicates whether each entry is a

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