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1 October 20X1, Bakari’s bank overdraft was $3,270. During the year to 30 September 20X2, he issued cheques with a total value of $189,642. His total lodgements during the year were $191,729 In addition, bank charges of $827 were incurred. What is Bakari’s bank balance brought forward at 1 October 20X2 as per his accounting records?
$2,010 credit
$4,530 debit
$3,56 credit
$6,184 debitWhy 827 are subtracted at the end? We want to know that what balance was brought forward in the accounts on October 2012 so we will subtract unpresented cheques from bank statement and add uncleared cheque to find reconciled amount and than deal with bank ledger
-3270 + 191729 – 189642 = -1183
We have bank charges which are not yet charged according to bank ledger so we will add 827 to -1183 which make 356 credit.Why are you assuming the there are unpresented cheques and lodgements not entered? These are the transactions for a year and will all have been entered in the ledger account. Also, you cannot assume that the bank charges have not been entered – they will be entered during the year as they are charged.
The balance on the ledger account was -3,270 at the start of the year.
After entering all the transactions the balance at the end of the year will be -3,270 – 189,642 + 191,729 – 827 = -2,010
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