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I have a excercise like this:
The following bank reconciliation statement has been prepared by a trainee accountant:
Overdraft per bank statement: $3860
Less: outstanding cheques: $9160
Add: deposits credited after date: $16690
=> Cash at bank as calculated above: $21990What should be the correct balance per the cash book?
A. $21990 balance at bank as stated
B. $3670 balance at bank
C. $11390 balance at bank
D. $3670 overdrawnWhy the answer is B, I learned in text book and found that the balance c/d in cash account after we adjust it by means of journal entries is equal to the balance per cash book in bank statement, i choose A, why is my answer wrong.
On the other hand, why overdraft per statement is expressed in form of the positive number 3860, why not -3860?
If they say there is an overdraft of 3860 then they do not need to write that it is negative – an overdraft is automatically a negative balance. Although by all means use negatives in your workings.
You do not need to use journal entries – Paper F3 is not really a double entry exam!
The outstanding cheques will make the overdraft bigger – so it becomes 3860 + 9160 = 13020.
The deposits credited after date make the overdraft smaller and here turn it into a positive balance: 16690 – 13020 = 3670 – this is the balance at the bank in the cash account.
Please change your picture – the ACCA get angry when people use their logo, because it is copyright and they do not allow it to be used without permission.
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