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For MA 1 paper. FA 1 is also available there
3. Your firm’s bank statement at 31 oct 20×8 shows a balance of $13400. You subsequently discovered that the bank has dishonored a customer’s cheque for $300 and has charged bank charges of $50 neither of which is recorded in your cash book. There are unpresented cheques totaling $2400. Amounts paid in but not yet credited by the bank amounts to $1000. You further discovered that an automatic receipt of $190 from a customer has been recorded as a credit in your cash book.
Your cash book balance prior to correcting the errors and omissions was?
A- $11455
B-$11960
C-$12000
D-12150Answer:
Bank Statement 13400 + 300 + 50 – 2400 +1000 -380 = 11970
Can you help with this please as I’m not sure if this is correct, it is not one of the given answers.
3. Your firm’s bank statement at 31 oct 20×8 shows a balance of $13400. You subsequently discovered that the bank has dishonored a customer’s cheque for $300 and has charged bank charges of $50 neither of which is recorded in your cash book. There are unpresented cheques totaling $2400. Amounts paid in but not yet credited by the bank amounts to $1000. You further discovered that an automatic receipt of $190 from a customer has been recorded as a credit in your cash book.
Your cash book balance prior to correcting the errors and omissions was?
A- $11455
B-$11960
C-$12000
D-12150Answer:
Bank Statement 13400 + 300 + 50 – 2400 +1000 -380 = 11970
Can you help with this please as I’m not sure if this is correct, it is not one of the given answers.
Re: Question 3
Bank Statement 13400 + 300 + 50 – 2400 +1000 -380 = 11970
Can you help with this please as I’m not sure if this is correct, it is not one of the given answers.
Hi Ken,
Why would the bank charges not be added onto the cash book figure in the question?
Thank you.
Net Assets = Total Assets – Total Liabilities
And Net Assets = Capital + Profits – Drawings
It will balance because on the suspense account you will have a credit entry of $27 Debit the rent account, credit the suspense account for overstated payment. And then the refund will be Credit the Receivable Control Account debit the Suspense Account so they cancel each other out.
You have an error of omission
An error of transposition
A one sided error of omission.Abdullah may I ask where you are getting the questions from please? These would be very helpful for me if you could let me know please
Hi Ken, I thought that the balance per the bank statement was positive as we debit it when we receive cash. Why then do you say it’s overdrawn please?