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Hello guys, thanks for the great work you are doing for us. what do we do in a case where a business owner does not keep proper books of account, but he regularly print out the analysis of the receipts and pay’ts in and out of his bank acc however, at the end of the fyr he finds out that some of cheques for expenses were not yet presented for pay’t? how do we go about it in the financial statements?
I assume that you have watched the free lecture on bank reconciliations, in which case you will know that if he had been keeping proper books of accounts then he would have entered in the cash account all cheques that had been written (i.e. payments).
Any that had not been presented to the bank and so had not yet appeared in the bank statement would explain why the bank statement was different (which is what we do in the reconciliation).
However the amount that must appear in the Statement of financial position is the correct cash account figure. In this case it will be the balance on the bank statement less the unpresented cheques (the ones that have not yet been presented to the bank for payment), which would have been entered in the cash account if he had have been keeping proper records.
Thanks Mr John, i really appreciate your help. How can i access your free lectures?
@matovubrian said:
How can i access your free lectures?You can find a link to lectures and notes from the home page,
or just click here:
https://opentuition.com/acca/acca-lectures/
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