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Hi Mr John ,
Can you pls help me this ( Question 16.2 ) .– ” the cash book show a bank balance 5675 overdrawn ” , so this 5675 will be on the CR side of cash account ?
‘A standing order for 125$ has been entered twice ” . so standing order is on credit side of cash account . it is entered twice , to cancel 125 $ , then we need to DR 125 ?
– Dishonoured cheques for 450$ has been debited instead of credit . to cancel this 450$ , we CR 450 and then record ” the correct ” 450$ on credit side . then it should be 900$ CR side ?
But when I look at the book ‘answer . .they take 5675 ( I thought it will be ( 5675 ) ) less 125 and add 900 ? it is all opposite to my perspective . Many Thanks
Everything you have written is correct – but did you actually write up the t-account?
Because if you did, then you will see that if you start with a credit balance and then debit with 125 then the credit balance will decrease. If you credit with 900 then the credit balance will increase!
Thanks for your quick responds , Mr John
yes , I did draw the T-account for this kind of answer . I’ve admired someone who doesn’t need to draw t-account and still can solve the question ( and seem like most of people that I know that they never have to draw it except me 🙁 )
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