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Hi teacher! Please help me with this one
Mauritz Co is preparing a bank reconciliation. The bank balance in the general ledger is $540
credit. There are two items that have not yet been dealt with.
1 A cheque for $620 was sent to a supplier but is not yet showing on the bank statement.
2 A bank charge of $28 was charged by the bank, but was not recorded by Mauritz Co.
What is the closing balance on Mauritz Co’s bank statement?
A $1,132 overdrawn
B $1,188 overdrawn
C $52 cash at bank
D $108 cash at bank
ans is C,
However, my understanding is, firstly to increase credit balance in ledger (540+28) CR568. Following this we can get bank balance DR568 (mirror effect). Furthermore, 620 was not shown on bank statement, which increases DR bank statement, 620+568 = DR1188 (overdrawn).
Please help me to understand where I’m wrongThe balance on the bank statement should indeed end up showing a DR balance of 568 (which because it is in the bank statement means they are showing an overdraft of 568).
However, since the 620 payment is not yet on the bank statement, it means that at the moment the balance on the bank statement is 620 more than being overdrawn by 568.
So the balance will currently be appearing as 620 – 568 = 52, cash in the bank.
I do suggest that you watch my free lectures on this. The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
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