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Q1) The following reconciliation statement has been prepared by a trainee;
BANK RECONCILIATION SEP 20X2
Balance AS PER BANK (overdrawn) 36,840
Add: lodgments 51,240
88,080
Less: unpresented cheques 43,620
Assuming the amount started for the item other than cash book balance are correct, what should the cash balance be?
? $44,460 CR
? $60,020 CR
? $29,220 DR
? $29,220 CR
here I don’t understand that is it asking the closing balance of cash book? or the opening balance because my answer came 29220 but in the debit side but the answer shown is the credit one, how can it be possible to show closing overdrawn balance in credit side?Q2) if it’s written that the adjusted cash book balance as per the bank reconciliation was a debit balance of 1060.
so, where we have to put it in the cash book ledger? it’s an opening balance given for the next period right? so for this period we will show it in the credit closing balance?In future you must ask in the Ask the Tutor Forum if you want me to answer.
1. An overdraft is a negative balance and so is always a credit balance.
2. If the opening balance is a debit balance, then it is a debit in the cash account at the start of the period.
Have you watched my free lectures on bank reconciliations?
not clear with the first one
if I make a bank statement ledger with debit side being the negative one
I will place opening balance on the debit side and lodgments on credit side and the unpresented cheques on the debit side
so, we will get the closing balance of 29220 credit on the bank statement ledger
and the cash book ledger has to be the opposite, right?
so, it should be a debit 29220, right?
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