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Sandilands Co uses a computer package to maintain its accounting records. A
printout of its cash book for the month of May 20X3 was extracted on 31 May and is
summarised below.
$ $
Balance b/d 546 Payments 5,966
Receipts 6,293 Balance c/d 873
6,839 6,839
The company’s chief accountant provides you with the following information.
(a) Bank charges of $630 shown on the bank statement have not been entered in
the company’s cash book.
(b) Three standing orders entered on the bank statement have not been recorded in
the company’s cash book: a subscription for trade journals of $52, an insurance
premium of $360 and a business rates payment of $2,172.
(c) A cheque drawn by Sandilands Co for $693 and presented to the bank on 26
May has been incorrectly entered in the cash book as $936.
After correcting the errors above, what is the revised balance on the cash book?
A $2,098 debit
B $2,584 debit
C $3,868 credit
D $3,382 crediti dont know why the answer is A. If A is correct i think that it should be 2,098 credit Please help me. Thank you so much!
(a) and (b) all need entering in the cash book and will reduce the balance.
For (c) the balance needs increasing by 936-693 = 243 because the wrong figure was entered.
So the correct balance – 873 – 630 – 52 – 360 – 2172 +243 = 2098
It should indeed be a credit balance – there must be a typing error in your book. Does your book not show workings with the answers?
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