Question

1. The firm’s Cash Book showed a Dr. balance of S$7,522 on 31st January 2004. The Bank statement showed a different balance. The following differences were discovered.

1. A cheque of S$364 issued to a creditor was not reflected in the bank statement.
2. Cheques totalling S$147 deposited on 30th January were not credited.
3. Bank paid S$240 to insurance company per standing order.

4. Bank charges, S$86.

5. A cheque of S$132 from K Sly deposited on 27th January was returned unpaid. This was not recorded in the Cash Book.

Questions(Explanation required):

1.Update the Cash Book
2.Prepare a Bank Reconciliation Statement as at 31st January 2004

Answer 1

Bank Reconciliation Statement
Particulars	Amount
Bank Balance	7281
Deduct : Uncleared Cheques	364
Add: Deposit in transit	147
Adjusted Balance in Bank Statement	7064
As per firm cash book balance on 31st, january 2004	7522
Less: Insuarance charges	240
Less: bank charge	86
Less: Written Cheque	132
Adjusted cash Balance	7064