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Good day sir/ma,
Please I need clarification on two things
Firstly why is dishonoured cheque first recorded by the bank when it us received by the owner first? So why is it said to be an item in bank reconciliation and not in the cash book.Second on the earlier forum on bank reconciliation
In future, if you want me to answer then you must ask in the Ask the Tutor Forum – this forum is for students to help each other.
When a cheque is received, it is immediately entered in the cash account. It is then given to the bank, but if it is dishonoured then no money appears in the bank account. The bank then informs us that there is no money and therefore we need to remove it from the cash account.
This is all explained in my free lectures on bank reconciliations. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
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