Ackermans Stores compared their cashbook for September 2013 with their bank statement. The following differences were discovered. a) On 30 September 2013, the cashbook had a favourable balance of N$1 250 and the bank statement showed an overdraft of N$9 013.

b) Storm Stores had not recorded a cheque (previously received from Paula) for N$900 returned by bank marked R/D.

c) A deposit of N$9 780 on 30 September 2013 did not appear on the bank statement.

d) Rent received, N$3 090, had been recorded in the cashbook as N$3 900.

e) The bank had received N$1 500 directly from Faith a debtor. Ackermans Stores had not been advised of this.

f) No entry had been made in the cashbook for N$2 430 paid directly by the bank for insurance.

g) Cheque number 169 payable to Wave Stores for N$2 367 had not been presented for payment. h) Bank charges N$120 and interest on overdraft N$90 were included on the bank statement, but had not been recorded in the cashbook.

You are required to: a) Write up an updated cashbook for Ackermans Stores and show the new balance on 1 May 2012. (9 marks)

b) Prepare a bank reconciliation statement as at 30 September 2013. (4 marks)

c) Why is it important to prepare a bank reconciliation (2 marks)