Bank Recon

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January 15, 2019 at 10:06 am #502017
finnfinn
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Dear sir, if the question mentions that the bank balance is o/d, it should be a negative figure correct?

Question :

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 overdrawn

Answer :

Balance b/d 5,675 o/d —— why isnt this (5,675)?
Less: standing order (125)
Add: dishonoured cheque (450 ? 2) 900
6,450 o/d

thank you sir and sorry for the disturbance 🙁
January 15, 2019 at 3:01 pm #502074
John Moffat
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- Topics: 57
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An overdraft is a negative balance. But that doesn’t mean you have to put it in brackets – you can if you want, but writing o/d against it makes it clear that it is an overdraft.

This isn’t a maths exam 🙂
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