ADBM – Full Time

Financial Accounting – Tutorial

Bank Reconciliation Statement
Question 1
Sirisena’s Furniture’s Cash Book at 30th November 2019 showed a debit balance of Rs.15, 500
although his bank statement showed Rs.25, 660 credit balance. Detailed examination of the
two records revealed the following:
(a) The debit side of the cash book had been under cast by Rs.700.

(b) A cheque issued by Sirisena’s furniture for Rs.12, 500 in favour of Arpico had been omitted
by the bank from its statement. The bank has mistakenly debited the cheque to another
customer’s account.

(c) A cheque for Rs.1, 820 drawn in payment of the electricity expenses had been entered in the
cash book as Rs. 1,280. But was shown correctly on the bank statement.

(d) A cheque for Rs.5, 400 received from Mr.Mahendran after depositing into the bank was
dishonored. It is recorded correctly by the bank. But no entry relating to the dishonour had
been made in the cash book.

(e) A dividend income of Rs.1, 450 has been received directly to the bank account and no entry
made in the cash book.

(f) Cheques totaling Rs.4, 200 issued by Sirisena Furniture’s on 29th November had not been
presented for payment.

(g) A Cheque deposited for a value of Rs.1, 900 on 30th November has not realized yet in the
bank account.

(h) Bank Charges amounting to Rs.850 had been debited by the bank but not entered in the
cash book.

Required:

1. Briefly explain the purpose of preparing the bank reconciliation statement ( 4 marks)

2. Prepare the adjusted cash book after making necessary entries. ( 8 marks)

3. Prepare a statement reconciling Sirisena Furniture’s corrected cash book with his bank
statement at 30th November 2019. (8 Marks)
Question 2

Kay Rogan’s Cash Book at 30th November 2012 showed an overdrawn position of Rs3, 630 though
her bank statement showed only Rs2, 118 overdrawn. Detailed examination of the two records
revealed the following:

(a) The debit side of the cash book had been under cast by Rs300.
(b) A cheque for Rs1, 560 in favour of Z Suppliers Ltd., had been omitted by the bank from
its statement, the cheque having been debited to another customer’s account.
(c) A cheque for Rs182 drawn in payment of the telephone account had been entered in the
cash book as Rs128 but was shown correctly on the bank statement.
(d) A cheque for Rs210 from A. brooks having been paid into the bank was dishonoured
and shown as such on the bank statement although no entry relating to the dishonour had
been made in the cash book.
(e) The bank had debited a cheque for Rs126 to Kay’s account in error; it should have been
debited by them to Ray Kogan’s account.
(f) A dividend of Rs90 on Kay’s holding of Ordinary Shares has been paid direct to her
bank account and no entry made in the cash book.
(g) Cheques totaling Rs1260 drawn on 29th November had not been presented for payment
(h) A lodgement of Rs1080 on 30th November had not been credited by the bank.
(i) Interest amounting to Rs228 had been debited by the bank but not entered in the cash
book.
Required:
1. Make any necessary entries in the cash book.
2. Prepare a statement reconciling Kay Rogan’s corrected cash book with her bank
statement at 30th November 2012. (20 Marks)