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Dear Mr Moffat,
this is a problem #216 from p.60 of Kaplan’s F3 Exam kit. (If you want me to, I will copy the problem here, but right now I am just focusing on the part of it that troubles me.)
The problem asks us for the balance in the cash book after the necessary adjustments.I don’t understand why the solution to the problem ignores the bank charges of $2,340. Don’t they affect the balance in the cash book?
Also, why is the direct debit of $250 that has not been recorded in the ledger accounts ignored?Thank you!
I am sorry but I do not have the Kaplan Exam Kit (only the BPP one).
Bank charges do affect the balance in the cash book, but I am guessing that the question maybe gives you the balance on the bank statement?
I assume that you have watched our lectures?
Our lectures are a complete course for Paper F3 and cover everything you need to be able to pass the exam well 🙂start bank reconciliation with bank statement balance and end with the cash book balance.
Question
After recording all missed entries
Can I start with cash balance and end with bank statement balance as reversing the process of bank reconciliation? I should get the same balance as in the bank statement?
I think there could be two formula of bank reconciliation
Start cash book balance ————-
add outstanding Cheques ————- cheques paid but not yet cashed
Less Outstanding deposits (————) cheques received but not yet cleared
Balance per bank statement ________No – there are not two forms of bank reconciliation!
We always start a proper bank reconciliation with the balance on the bank statement and end with the balance in the cash account (because it is the balance on the cash account that will appear in the SOFP).
How you do your own workings in the exam is irrelevant because these will only be asked as MCQ’s and nobody looks at the workings for the MCQ’s – the computer simply marks according to which answer is chosen.
I really do suggest that you watch the free lecture on bank reconciliations.
True, your lecture on bank reconciliations really explains it all. 🙂 I watched those three videos and I intend to watch many more. It’s really nice that they’re open and free! So, Yahya, you should definitely check those out.
Thanks for the comment.
(Errr…..I recorded the lectures so I don’t know why you are telling me to check them out 🙂 )
😀 I can see why you’d ask. What escaped your attention is that I was advising the person above, Yahya. (It wasn’t me who asked the last question :))
OK 🙂
(although by all means ask questions in this forum, but please do not give answers – it is Ask the Tutor. But do give answers in the other F3 forum please 🙂 )
That is clear cut answer thanks John Moffat and thanks to the commenter (kfaz) will watch it again and again. I like accounting especially when John is the teacher
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