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The bank has credited the account in error with $425 which belongs to another customer
“has credited” means:
bank has reduced the account of customer by 425$?
because,l have seen that the account of customer is the credit balance for the BanKIf the bank has credited the account then it means that the bank has added money to the account.
Again, why on earth are you not watching my free lectures? I explain in the lectures exactly how the bank does things and you cannot expect me to type out all my lectures here.
The cash book shows a bank balance of $5,675 overdrawn at 31 August 20X5. It is subsequently discovered that a standing order for $125 has been entered twice, and that a dishonoured cheque for $450 has been debited in the cash book instead of credited. What is the correct bank balance?
A $5,100 overdrawn
B $6,000 overdrawn
C $6,250 overdrawn
D $6,450 overdrawnans is d 6450 overdrawn.i didnt get it how?
The standing order is a payment and it has been entered twice. So one of them needs cancelling and the overdraft therefore reduce by 125.
The dishonoured cheque should have been credited (to cancel the receipt) and not debited, therefore we need to credit with 2 x 450 = 900, which will make the overdraft bigger.
Therefore the correct overdraft is 5675 – 125 + 900 = 6,450.
Do watch my free lectures on bank reconciliations, because all of the above is explained.
The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
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