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Hello sir
This question is from online application and i have a doubt on the right answer plaese have a look and explain the answer.
Question:
Your cash book at 31 December 2015 shows a bank balance 565 dollar overdrawn. On comparing this with your bank statement at the same date, you discover the following:
1. A cheque for 57 drawn by you on 29 December 2015 has not yet been presented for payment;
2. A cheque for 92 from customer, which was paid into the bank on 24 December 2015.
What is the correct bank balance to be shown in the statement of financial position at 31 December 2015??Answer is 657 overdrawn. Is it right? if yes please explain why?
anon39: Please do not answer in this forum – it is the Ask the Tutor Forum and you are not the tutor 🙂 (But please do help people in the other Paper F3 forum).
Your answer is not correct anyway!!! According to what was typed, 565 overdrawn is the balance in the cash book – not the bank statement.
raufhasanov: You have either copied the question wrongly, or the question is nonsense!
The balance to be shown in the SOFP is always the corrected balance in the cash book. (which should reconcile with the balance shown on the bank statement).The balance in the cash book (as you have typed it) is 565 overdrawn. The fact that there is an unpresented cheques of 57 and lodgements of 92 not yet credited is of no relevance – they will have been entered in the cash book. Therefore the balance on the cash book is correct at 565 overdrawn.
The answer of 657 that you are quoting has increased the overdraft by 92. This is why I have written that you have either copied the question wrongly, or the question is nonsense.
As I replied to your other post – if you want to be sure of passing the exam then you should be using a Revision Kit from one of the ACCA approved publishers (not simply finding questions online!).
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