Question Tag: Bank Statement

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  • 1 Marks

FA – MAY 2015 – L1 – SA – Q19 – Bank Reconciliations

Calculate the bank statement balance from the adjusted cash book balance.

Question:
The balance as per bank statement is:
A. N39,500
B. N41,500
C. N139,500
D. N179,500
E. N239,500

Answer: A
Explanation:
From the adjusted cash book balance of N109,500, subtract uncredited cheques of N70,000.
Bank statement balance = N109,500 – N70,000 = N39,500

  • 6 Marks

FA – Nov 2023 – L1 – Q3a – Bank reconciliations

Explain reasons for conducting a bank reconciliation and identify items that may appear in a bank reconciliation statement.

i) Explain THREE (3) reasons for carrying out a bank reconciliation. (3 marks)

ii) State THREE (3) items which may appear in the bank reconciliation statement. (3 marks)

i) Reasons for carrying out a bank reconciliation:

  1. To confirm the accuracy of entries in the cash book:
    A bank reconciliation helps to ensure that all transactions recorded in the cash book are accurate and complete. Any discrepancies between the cash book and the bank statement can be identified and corrected.
  2. To uncover any error which may have been made by the bank:
    Sometimes banks may make errors in recording transactions. A bank reconciliation allows these errors to be identified, enabling the business to notify the bank for correction.
  3. To provide a reliable cash figure for the trial balance:
    By reconciling the bank balance, businesses can ensure that the cash figure reported in the trial balance is accurate and reliable, reflecting the actual cash available.

ii) Items appearing in the bank reconciliation:

  1. Unpresented cheques:
    These are cheques that have been issued by the business but have not yet been presented to the bank for payment. They appear in the cash book but not yet in the bank statement.
  2. Outstanding lodgements:
    These are deposits that have been made by the business but have not yet been credited by the bank. They appear in the cash book but not yet in the bank statement.
  3. Bank errors:
    Errors made by the bank, such as incorrect debits or credits, can appear in the bank reconciliation. These need to be identified so that the bank can be informed and the errors corrected.

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