Nova scotia bank collect bills for encashment on behalf of its customers. It is a part of its secondary functions. During the year 2015 it received bills for collection amounting to OMR75,000. The balance on bills for collection on 31/12/2014amounted to OMR 82,000. It returned the dishonoured bills to its customers amounting to OMR 13,000.

Bills collected during the year amounted to OMR 325,000 Record these transactions in the journal and prepare the ledger for the same. (5 marks)

(b)We all know that in a manufacturing business goods are produced and so sold at a higher price, the difference between the cost of manufacture and sale price is the profit. In a service industry like bank and insurance what is the source of income and expense? How banks and insurance work to earn their profit? The answer should be in your own words. (200-300 words) ( 5 marks)