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Dear sir,
I do have watched the lectures concerning the bank reconciliation but still I have some doubt about certain issues.1. Cash book shows a balance of $565 overdrawn. What does the mean? A debit or credit balance in the cash book
2. Bank statement showed an overdrawn balance of $2015. What does this mean? A debit balance or credit balance?
I do think you need to watch the lectures again, because I specifically stress the answers to your questions!!
A credit balance in the cash account means that they are overdrawn. (A debit balance means they have an asset i.e. they do have cash in the bank)
The bank does things the “opposite way round” (and I explain exactly why this is the case in the free lectures!).
So an overdraft in the bank statement is a debit balance.Dear sir,
Can you please help me to figure out this problem. Thanks in advance.Cash book showed a balance of $565 overdrawn.
Unpresented cheques=$57
A cheque for $92 paid into bank has been dishonoured.MY ANSWER:
Balance as per cash book -565
Add unpresented cheque 57
Therefore balance as per bank statement is -565+57=508(overdrawn)Is it the right way way that I am doing it?
You cannot have watched the free lectures – you really should. I cannot possibly type out all of the lectures here.
Also, you should not be attempting questions for which you do not have the answers. It is wasting your time and you should buy a Revision Kit from one of the ACCA approved publishers – they have lots of questions together with answers.Unpresented cheques are cheques that have already been entered in the cash book (but have not yet appeared on the bank statement). So the cash book balance does not need any adjustment for this, but it does indeed mean that the overdraft in the bank statement will be higher than that in the cash book.
Cheques dishonoured will have been entered into the cash book as a receipt. Since they were later dishonoured the receipt needs cancelling (by means of a credit entry) which will increase the overdraft in the cash account. Until the cash account is corrected, the bank statement will be showing a bigger overdraft.
What does ‘cash and cheques received but not yet banked’ and ‘cheques banked’ mean?
Thanks for the reply sir. I know my question are quite annoying but I really need to clear some doubts. Thanks for helping. 🙂
But have you actually watched all of our free lectures?
They are a complete course for Paper F3, and if you have not watched them then it is very annoying.
“A cheque for $620 was sent to a supplier but is not yet showing on the bank statement”
Is this an unpresented or uncredited cheque?
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