Question 4 [27]

The following bank reconciliation statement was prepared by the bookkeeper of Veggie Stores for January 2020. The financial year of the business ends in January each year.

Bank overdraft as per bank statement	R35 000
Outstanding deposit on 10 January 2020	R12 900
28 January 2020	R10 000
Outstanding deposit: Cheque received from B Brother dated 24 February 2020	R1 800
Outstanding cheques:
No. 1642 (dated 20 July 2019)	R7 000
No. 9172 (dated 25 January 2020)	R9 800
No. 9753 (dated 3 March 2020)	R4 800
Bank charges	R570
Balance as per bank account in the General Ledger	?

Required:

1. Is the opening balance of R35 000 as per the bank statement a debit or a credit balance on the bank statement? Explain your answer. (2)
2. Explain why the business has entered cheque no. 9753 in the bank reconciliation statement. (3)
3. The business has made three other errors. Identify the amounts relating to these errors and explain why they are errors. Specify the corrective action that should be taken to correct these errors. (9)
4. Prepare a corrected bank reconciliation statement for January 2020. (7)
5. The owner is concerned about the outstanding deposit of R12 900. Explain why he is concerned. (2)
6. Propose TWO steps the owner should take to prevent things such as those described in Question 4.5 above from occurring again in the future. (4)

Complete question 4.3 and 4.4 specifically in format below

4.3

Amount	Error	Corrective action

(9)

4.4

	Debit	Credit

(7)