Question one.

a) Explain the term "bank reconciliation" and state the reasons for its preparation.

(b) Ssemakula, a sole trader received his bank statement for the month of June 2001. At that date

the bank balance was Sh. 706,500 whereas his cash book balance was Sh.2, 366,500.

His accountant investigated the matter and discovered the following discrepancies:

1. Bank charges of Sh.3, 000 had not been entered in the cashbook.

2. Cheques drawn by Ssemakula totaling Sh.22, 500 had not yet been presented

to the bank.

3. He had not entered receipts of Sh.26, 500 in his cashbook.

4. The bank had not credited Mr Ssemakula with receipts of Sh.98, 500 paid into

the bank on 30 June 2001.

5. Standing order payments amounting to Sh.62, 000 had not been entered into

the cashbook.

6. In the cashbook Ssemakula had entered a payment of Sh.74, 900 as Sh.79,

400.

7. A cheque for Sh.15, 000 from a debtor had been returned by the bank marked

"refer to drawer" but had not been written back into the cashbook.

8. Ssemakula had brought forward the opening cash balance of Sh.329, 250 as a

debit balance instead of a credit balance.

9. An old cheque payment amounting to Sh.44, 000 had been written back in the

cashbook but the bank had already honored it.

Match the variance with the correct formula where AU = actual units, BU = budgeted units, AS = actual selling price per unit, BS = budgeted selling price per unit, Group of answer choices Sales Price Variance [ Choose ] (Average market share 6 - budget market share 9%) times AU times Weighted Average Budget Cost per unit (AU - BU) times weighted average budgeted cost/unit (AS - BS) times AU (Actual market size units - Budgeted market size units) times Budget market share % times Weighted Average Budget Cost per unit Sales Volume Variance [ Choose ] (Average market share 96 - budget market share 96) times AU times Weighted Average Budget Cost per unit (AU - BU) times weighted average budgeted cost/unit (AS - BS) times AU (Actual market size units - Budgeted market size units) times Budget market share % times Weighted Average Budget Cost per unit Market Size Variance [ Choose ] (Average market share 6 - budget market share 9%) times AU times Weighted Average Budget Cost per unit (AU - BU) times weighted average budgeted cost/unit (AS - BS) times AU (Actual market size units - Budgeted market size units) times Budget market share 9% times Weighted Average Budget Cost per unit Market Share Variance [ Choose ] (Average market share % - budget market share %) times AU times Weighted Average Budget Cost per unit (AU - BU) times weighted average budgeted cost/unit (AS - BS) times AU (Actual market size units - Budgeted market size units) times Budget market share 9% times Weighted Average Budget Cost per unitWhich one of the following is a true statement regarding S&P 500 index? a) It is a price-weighted average of 500 largest U.S. stocks b) It is a value-weighted average of 30 largest US. stocks. C) It is a price-weighted average of 30 large stocks. d) It is an equally-weighted average of 30 largest US. stocks. e) It is a value-weighted average of 500 largest US. stocks Which of the following is the correct formula to calculate weighted-average unit cost for merchandise inventory? 1. Weighted-average unit cost = Cost of goods available for sale + Number of units available 2. Weighted average unit cost = Cost of goods available for sale / Number of units available 3. Weighted-average unit cost = Cost of goods available for sale - Number of units available 4. Weighted-average unit cost = Cost of goods available for sale x Number of units available 5. Non of a bove