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Annabel’s cash book shows her to be $2,030 overdrawn. A bank reconciliation, however, shows that a standing order payment for $365 had been entered in the cash book twice, and that a dishonoured customer’s cheque for $275 had been debited rather than credited in the cash book.
What is Annabel’s true overdraft position?You need to reduce the overdraft because of the standing order payment entered twice. You need to increase the overdraft by twice the amount of the dishonoured cheque – once to remove the incorrect entry and once to make the correct entry.
(The free lecture on bank reconciliations may help you)
This has nothing to do with Paper MA.
In future you need to ask in the Paper FA forum (although have you watched my free lectures on bank reconciliations, because this is explained in the lectures – the lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.)
The dishonoured cheque should have been credited and not debited. Therefore, as I wrote in the previous reply, you need to increase the overdraft by twice the amount of the dishonoured cheque – once to remove the incorrect entry and once to make the correct entry.
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