Friday, December 24, 2021 10:45 AM

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 Example 2
On 31 December 20X8 the bank columns of C Tench’s cash book showed a debit balance
of $1500. The monthly bank statement written up to 31 December 20X8 showed a credit
balance of $2950.
On checking the cash book with the bank statement it was discovered that the following
transactions had not been entered in the cash book.
1. Dividends of $240 had been paid directly to the bank.
2. A credit transfer-customs and Excise VAT refund of $260- had been collected by the bank
3. Bank charges $30

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 transactions had not been entered in the cash book.
1. Dividends of $240 had been paid directly to the bank.
2. A credit transfer-customs and Excise VAT refund of $260- had been collected by the bank
3. Bank charges $30
4. A direct debit of $70 for the RAC subscription had been paid by the bank.
5. A standing order of $200 for C Tench’s loan repayment had been paid by the bank.
6. C Tench’s deposit account balance of $1400 was transferred into his bank current
account.

A further check revealed the following items:

1. Two cheques drawn in favour of T Cod $250 and F Haddock $290 had been entered in the
cash book but had not been presented for payment.
2. Cash and cheques amounting to $690 had been paid into the bank on 31 December 20X8
but were not credited by the bank until 2 January 20X9.
a) Starting with the debit balance of $1500, bring the cash book (bank columns) up to
date and then balance the bank account.
b) Prepare a bank reconciliation statement as at 31 December 20X8.

Example 5
The following is a summary of Draco’s cash book for the month of December 20X6:

Receipts 1,469 Balance b/f 761

Balance c/f 554 Payments 1,262
––––– –––––
2,023 2,023
––––– –––––
All receipts are banked and payments made by cheque.

On investigation you discover:

1. Bank charges of £136 entered on the bank statement had not been entered in the
cash book.
2. Cheques drawn amounting to £267 had not been presented to the bank for payment.
3. A cheque for £22 had been entered as a receipt in the cash book instead of as a
payment.
4. A cheque drawn for £6 had been incorrectly entered in the cash book as £66.

What balance is shown on the bank statement at 31 December 20X6?

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