Chapter 6 nlkt

Alasdair’s business bank statement showed an overdrawn balance of £5,800 on 31 May 20X7.
When this was reconciled to the cash at bank account, the following differences were noted:

£30 Bank charges not recorded in cash at bank account

Standing order for local property tax not entered in cash at bank account 300

Outstanding lodgements 1,300

Credited in error to Alasdair's account by the bank 100

What was the original credit balance on Alasdair's cash at bank account at 31 May 20X7?

• £4,600
  

• £4,270
  

• £5,200
  

• £4,870
  

• £62,600

• £66,200

• £58,200

• £51,800

As at 31 December 20X7 a company’s bank statement shows a balance in hand of £2,000. The statement includes bank charges of £50 which have not yet been recorded in the company's cash at bank account. On 30 December 20X7 the company had paid a cheque of £1,000 to a supplier and banked £600 received from a credit customer; neither of these items appear in the bank statement.

The cash at bank balance on the company's statement of financial position at 31 December 20X7 should be:

• £1,600

• £3,600

• £2,400

• £400

• £12,350

• £12,550

• £12,290

• £12,090

Which two of the following items could appear on the debit side of the trade payables account?

• Cash paid to suppliers

• Irrecoverable debts written off

• Discounts received from suppliers that were not expected to be taken when the purchase was made

• Purchases

• Cash refunds from suppliers

Which two of the following matters require an adjustment to the figure for cash at bank account appearing in Justine's draft statement of financial position as at 30 June 20X5, rather than being reconciling items between the adjusted cash at bank account balance and the bank statement balance as at that date?

• Bank charges had been debited by the bank but had not been recorded in the cash at bank account

• A number of cheques drawn by Justine in June remained unpresented at the year end

• A cheque paid into the bank on 30 June 20X5 did not appear on the statement

• A cheque had been returned unpaid on 30 June 20X5 but Justine had not been notified of this by the bank

The following three matters were discovered by Daisy when she prepared her month end bank reconciliation. (1) The electronic banking transaction report includes a receipt of £560 in respect of a payment from a credit customer. This was not automatically matched to a transaction by the accounting system. On investigation, it was discovered that there was a bank error and the correct amount was £650.

(2) Bank charges debited by the bank have not yet been entered in the cash at bank account.

(3) The value of unpresented cheques exceeded the value of uncleared lodgements.

Which of these matters will require adjustments to the cash at bank account?

• (1) and (2) only

• (2) and (3) only

• (2) only

• (1) and (3) only

• An overstatement of expenses of £72 and the petty cash balance being £72 more than it should be

• An understatement of expenses of £72 and the petty cash balance being £128 less than it should be

• An understatement of expenses of £72 and the petty cash balance being £72 less than it should be

• An overstatement of expenses of £128 and the petty cash balance being £128 less than it should be

Goods invoiced at £25 had been returned by Samson Ltd to the supplier for a full refund. The only accounting entry made for the return was to debit the purchases account and credit the suspense account with £52.

Which of the following journal entries should be made to correctly record the return in the nominal ledgers?

• Dr Suspense £52, Cr Purchases £52

• Dr Suspense £52, Cr Trade payables £52

• Dr Suspense £52, Dr Trade payables £25, Cr Purchases £77

• Dr Trade payables £27, Cr Purchases £27

Peter's draft accounts show a loss of £22,000 for the year. On investigation you discover the following.

(1) £2,000 of repairs had been incorrectly recorded as a purchase of machinery on the last day of the year.

(2) Cash of £500, received in respect of a debt written off many years ago, had been credited to receivables.

(3) Closing inventory includes items costing £1,000 which were sold and delivered to the customer on the year end date.

What is the adjusted loss for the year?

• £25,500

• £24,500

• £23,500

• £19,500