The balance of the cash book is an overdraft of $765. The bookkeeper has identified an error whereby a customer receipt of $78 was recorded twice. In addition uncleared lodgements of $347 have been identified. What should be the overdraft on the bank statement?
$1,190 - correct ans
$496
$340
$1,034
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Cash book/ bank statement - can some explain in detail the answer.
4y ago#1Because a receipt was recorded twice, the correct balance on the cash account should be an overdraft of 765 + 78 = $843.
There are uncleared lodgements in the bank and therefore the balance on the bank statement will be overdrawn by an addition $347. The statement will therefore be showing an overdraft of 843 + 347 = $1,190.
Have you watched 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.
I saw the tutor bank reconciliation video. However, I have a hard time understanding why an unclered Cheque of 347(receipts) is added to overdraft.
4y ago#3Because when the cheque does later appear on the bank statement, it will increase the overdraft because it is a payment.
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