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Balance on the bank statement

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Balance on the bank statement

  • This topic has 3 replies, 2 voices, and was last updated 5 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • September 1, 2019 at 11:07 am #544034
    studystudy33
    Participant
    • Topics: 17
    • Replies: 11
    • ☆

    Your firm’s cash book show a credit balance of $1240 at 30 April 20X9. On comparison with the bank statement, you determine that there are unpresented cheques totalling $450, and a receipt of $140 which has not yet passed through the bank account. The bank statement shows bank charges of $75 which have not been entered in the cash book.

    What was the balance on the bank statement?

    A $1005 Overdrawn (Correct answer in the kit)

    B 930 O/d

    C $1475 in credit

    D $1550 in credit

    I don’t understand how A is the correct answer because my kaplan kit barely explains it. the answer is a cash ledger where 1240 and 75 are on credit side with the total balance being 1315

    September 1, 2019 at 4:24 pm #544074
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54711
    • ☆☆☆☆☆

    The only error in the cash account is that the bank charges have not been entered.

    So the correct balance is 1240 + 75 = $1315 overdrawn.

    However the bank statement will not show $1315 overdrawn because of the unpresented cheques and the unrecorded receipt. So you need to work backwards to find the balance showing on the bank statement, which will be 1315 – 450 + 140 = $1005 overdrawn.

    Have you watched my free lectures on bank reconciliations? The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.

    September 4, 2019 at 9:12 am #544649
    studystudy33
    Participant
    • Topics: 17
    • Replies: 11
    • ☆

    Thank you

    September 4, 2019 at 12:09 pm #544698
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54711
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Balance on the bank statement’ is closed to new replies.

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