Question
Question 7 (a) Define the following terms: Unpresented Cheques Standing Order Bad Debt provision (6marks) (b) On March 31 2010 the bank column of Mr.
Question 7
(a) Define the following terms:
- Unpresented Cheques
- Standing Order
- Bad Debt provision (6marks)
(b) On March 31 2010 the bank column of Mr. L Reids cash book showed a debit balance of $2 900. The monthly bank statement written up to March 2002 showed a credit balance of $2 950.
Investigations revealed the following:
(i) A credit transfer of $500 had been collected by the bank
(ii) Bank charges $30 was not entered in the cash book
(iii) A direct debit of $70 had been paid by the bank
(iv) A standing order $200 for insurance payment had been paid by the bank
(v) Two cheques totalling $540 were paid to supplier but had not been presented to the bank
for payment
(vi) Cash and cheques amounting to $690 had been paid into the bank on March 31 but were
not credited by the bank until April 2 2003.
Required:
(i) Starting with the balance of $2 900, bring the cash book up to date.
(10 marks)
(ii) Prepare a bank reconciliation statement as at March 31 2010 (9 marks)
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