Question Tag: Adjusted Cash Book

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  • 10 Marks

FA – Nov 2024 – L1 – Q3b – Bank Reconciliation

Prepare an adjusted cash book and reconcile it with the bank statement balance.

The cash book of Lawra Ltd as at 31 December 2023 shows a balance of GH¢36,900, which does not match the bank statement balance of GH¢41,100. Investigation revealed the following discrepancies:

  1. Cheques received of GH¢104,000, GH¢10,000, and GH¢24,900 were still in the business drawer.

  2. Standing orders for electricity charges (GH¢2,400) and insurance (GH¢3,600) were paid by the bank but not recorded in the cash book.

  3. The bank charged GH¢300 for a cheque book issued to Lawra Ltd.

  4. The bank incorrectly debited GH¢9,910 to Lawra Ltd’s account, which was intended for another customer.

  5. A credit transfer of GH¢10,000 was received but not recorded in the cash book.

  6. A cheque for GH¢140,000 drawn by Lawra Ltd was correctly recorded in the cash book but was debited as GH¢14,000 by the bank.

  7. The following cheques, paid in November 2023, remained unpresented:

    Cheque Number Amount (GH¢)
    0000111 4,000
    0000117 10,000
    0000120 9,310

Required:

i) Prepare the adjusted cash book for Lawra Ltd as at 31 December 2023.

ii) Prepare a bank reconciliation statement reconciling the adjusted cash book balance to the bank statement balance.  

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  • 20 Marks

FA – Nov 2021 – L1 – SB – Q1 – Bank Reconciliation

The question asks for the preparation of an adjusted cash book and a bank reconciliation statement and requires an explanation of the need for regular reconciliation.

On April 6, 2020, Alhaji Mogaji received his bank statement for the month ended March 31, 2020. The bank statement showed a balance of N41,740,000 (overdraft) as at March 31, while the cash book showed a balance of N52,599,000 (credit) as at that date. On examination of the cash book and the bank statement the following were discovered:

  1. Bank charges of N201,000 had not been recorded in the cash book.
  2. Alhaji Mogaji exceeded his overdraft limit during the month of March. The bank had therefore charged him a default penalty of N250,000. This was not reflected in the cash book.
  3. A sum of N1,250,000 had been credited to Alhaji Mogaji’s bank account in error.
  4. A cheque for N1,230,000 had been returned by the bank as dishonoured. In effect, the bank charged Alhaji Mogaji N15,000, which was not reflected in the cash book.
  5. Cash receipts of N3,740,000 were posted as cash payments of N4,730,000 in the cash book.
  6. On March 21, Alhaji Mogaji transferred cash of N650,000 to his personal bank account, but this was credited to the business bank account in error by the bank.
  7. Standing orders and direct debits of N1,115,000 had not been posted to the cash book.
  8. Customers had transferred N2,170,000 directly to the bank account. The credit alert was received, but no record had been made in the cash book.
  9. An amount of N5,120,000 lodged to the bank account on March 31, 2020, had not been credited by the bank.
  10. The following cheques drawn on the bank account had not been presented for payment as at March 31, 2020:
  • Cheque No: 4528, March 11, 2020, for N840,000
  • Cheque No: 4535, March 28, 2020, for N1,740,000
  • Cheque No: 4537, March 31, 2020, for N3,670,000

You are required to:
a. Prepare the adjusted cash book for the month of March 2020. (9 Marks)
b. Prepare a statement on March 31, 2020, reconciling the bank statement balance with the adjusted cash book balance. (7 Marks)
c. Explain TWO reasons for preparing a bank reconciliation statement on a regular basis. (4 Marks)

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  • 10 Marks

FA – May 2017 – L1 – SB – Q6a – Bank Reconciliation

Prepare an adjusted cash book and bank reconciliation statement for Payless Ltd.

The Accountant of Payless Limited, on receiving the bank statement of the business for September 2016, noticed a difference between the bank account balance and the bank column of the company’s cash book. On investigation, the accountant found the following:

(i) The bank statement had been debited in error to the tune of N500,000. The error had been discovered by the bank and would be reversed the next working day.
(ii) Cheques amounting to N840,000 paid into the bank were uncleared and yet to be credited to the business bank account.
(iii) Some cheques amounting to N206,500 paid into the bank were dishonoured.
(iv) Standing order of N100,000 with the bank had been effected by the bank.
(v) Dividends for investments amounting to N45,000 had been received directly into the bank account.
(vi) Some of the business debtors had paid directly into Payless Limited’s bank account an amount of N2,485,000.
(vii) Cheques amounting to N520,000 issued to creditors were recorded in the cash book but were yet to be presented to the bank.
(viii) Bank charges were N1,050.
(ix) Interests received from the bank were N4,255.

The balance on the bank column of the cash book was N3,797,268, and the bank statement balance was N5,203,973.

You are required to:

i. Prepare the adjusted cash book. (6 Marks)
ii. Prepare the bank reconciliation statement. (4 Marks)

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  • 14 Marks

FA – Nov 2023 – L1 – Q3b – Bank reconciliations

Prepare an adjusted cash book and reconcile it with the bank statement for Mensah's account.

b) Mensah is preparing his bank reconciliation for the month of June 2022. His bank statement shows a balance of GHȼ1,824 cash at the bank. The balance on the cashbook in his general ledger is GHȼ645 (credit).

He has identified the following reasons for the difference:

  1. The bank has credited the account in error with GHȼ485, which belongs to another customer.
  2. A cheque drawn, amounting to GHȼ345, has been entered in the cashbook as GHȼ354.
  3. Bank charges of GHȼ320 on the bank statement have not been entered in the cashbook.
  4. Cheques totalling GHȼ664 have been correctly entered on the debit side of the cashbook but have not been paid in at the bank.
  5. A customer’s cheque for GHȼ460 was returned by Mensah’s bank in June as the customer had insufficient funds in his account. Mensah has not recorded the return of the cheque in his records.
  6. Six cheques have not yet been presented at the bank. These are:
Cheque No. Amount (GHȼ)
845763 550
845739 1,540 (see note 7)
846435 480
846502 380
846548 269
846582 200
Total 3,419
  1. Cheque number 845739 was lost and was cancelled. Mensah has not recorded the cancellation of the cheque.

Required:

i) Prepare the adjusted cashbook for Mensah in a format which clearly indicates whether each entry is a debit or credit. (7 marks)

ii) Prepare a reconciliation of the bank statement balance to the adjusted cashbook balance. (7 marks)

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  • 20 Marks

FA – May 2021 – L1 – Q3 – Bank reconciliations

Preparation of an adjusted cash book, bank reconciliation statement, and explanation of the petty cash book operations.

a) On 4 April 2020, Kofi Ntam received his bank statements for the month ended 31 March 2020. The bank statement showed a balance of GH¢417,400 (overdraft) as at 31 March, whilst the cash book showed a balance of GH¢525,990 (credit) as at that date. Upon examination of the cash book and the bank statement, the following were discovered:

  • Bank charges of GH¢2,010 had not been recorded in the cash book.
  • Kofi Ntam exceeded his overdraft limit during the month of March. The bank had therefore charged a penalty of GH¢2,500. This has not been recorded in the cash book.
  • A sum of GH¢12,500 had been wrongly credited to Kofi Ntam’s bank account by the bank.
  • A cheque for GH¢12,300 had been returned by the bank as dishonored. As the cheque had been dishonored, the bank charged Kofi Ntam GH¢150. This has not reflected in the cash book.
  • Cash receipts of GH¢37,400 were posted as cash payment of GH¢47,300 in the cash book.
  • On 21 March, Kofi Ntam deposited an amount of GH¢6,500 into his personal bank account. This was deposited to the business bank account in error by the bank.
  • Standing orders and direct debits of GH¢11,150 had not been posted to the cash book.
  • Customers had deposited GH¢21,700 directly to the bank account. This has not been recorded in the cash book.
  • Receipts of GH¢51,200 deposited to the bank account on 31 March 2020, had not been credited by the bank.
  • The following cheques, drawn on the bank account, had not been presented to the for payment as at 31 March 2020:
Cheque Number Date Cheque was Written Amount (GH¢)
No. 45280 11 March 2020 8,400
No. 45350 28 March 2020 17,400
No. 45370 31 March 2020 36,700

Required:
i) Prepare the adjusted cash book for the month of March 2020.
(8 marks)

ii) Prepare a statement on 31 March 2020 reconciling the adjusted cash book with the bank statement balance.
(6 marks)

iii) Explain TWO (2) reasons for preparing bank reconciliation on a regular basis.
(2 marks)

b) A petty cash book is created to facilitate small payments in a business or organization. It is meant to meet the day-to-day expenses and it is entrusted into the hands of the petty cashier.

Required:
Prepare a brief note to Kofi Ntam explaining how the petty cash book operates.
(4 marks)

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  • 10 Marks

FA – Nov 2024 – L1 – Q3b – Bank Reconciliation

Prepare an adjusted cash book and reconcile it with the bank statement balance.

The cash book of Lawra Ltd as at 31 December 2023 shows a balance of GH¢36,900, which does not match the bank statement balance of GH¢41,100. Investigation revealed the following discrepancies:

  1. Cheques received of GH¢104,000, GH¢10,000, and GH¢24,900 were still in the business drawer.

  2. Standing orders for electricity charges (GH¢2,400) and insurance (GH¢3,600) were paid by the bank but not recorded in the cash book.

  3. The bank charged GH¢300 for a cheque book issued to Lawra Ltd.

  4. The bank incorrectly debited GH¢9,910 to Lawra Ltd’s account, which was intended for another customer.

  5. A credit transfer of GH¢10,000 was received but not recorded in the cash book.

  6. A cheque for GH¢140,000 drawn by Lawra Ltd was correctly recorded in the cash book but was debited as GH¢14,000 by the bank.

  7. The following cheques, paid in November 2023, remained unpresented:

    Cheque Number Amount (GH¢)
    0000111 4,000
    0000117 10,000
    0000120 9,310

Required:

i) Prepare the adjusted cash book for Lawra Ltd as at 31 December 2023.

ii) Prepare a bank reconciliation statement reconciling the adjusted cash book balance to the bank statement balance.  

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  • 20 Marks

FA – Nov 2021 – L1 – SB – Q1 – Bank Reconciliation

The question asks for the preparation of an adjusted cash book and a bank reconciliation statement and requires an explanation of the need for regular reconciliation.

On April 6, 2020, Alhaji Mogaji received his bank statement for the month ended March 31, 2020. The bank statement showed a balance of N41,740,000 (overdraft) as at March 31, while the cash book showed a balance of N52,599,000 (credit) as at that date. On examination of the cash book and the bank statement the following were discovered:

  1. Bank charges of N201,000 had not been recorded in the cash book.
  2. Alhaji Mogaji exceeded his overdraft limit during the month of March. The bank had therefore charged him a default penalty of N250,000. This was not reflected in the cash book.
  3. A sum of N1,250,000 had been credited to Alhaji Mogaji’s bank account in error.
  4. A cheque for N1,230,000 had been returned by the bank as dishonoured. In effect, the bank charged Alhaji Mogaji N15,000, which was not reflected in the cash book.
  5. Cash receipts of N3,740,000 were posted as cash payments of N4,730,000 in the cash book.
  6. On March 21, Alhaji Mogaji transferred cash of N650,000 to his personal bank account, but this was credited to the business bank account in error by the bank.
  7. Standing orders and direct debits of N1,115,000 had not been posted to the cash book.
  8. Customers had transferred N2,170,000 directly to the bank account. The credit alert was received, but no record had been made in the cash book.
  9. An amount of N5,120,000 lodged to the bank account on March 31, 2020, had not been credited by the bank.
  10. The following cheques drawn on the bank account had not been presented for payment as at March 31, 2020:
  • Cheque No: 4528, March 11, 2020, for N840,000
  • Cheque No: 4535, March 28, 2020, for N1,740,000
  • Cheque No: 4537, March 31, 2020, for N3,670,000

You are required to:
a. Prepare the adjusted cash book for the month of March 2020. (9 Marks)
b. Prepare a statement on March 31, 2020, reconciling the bank statement balance with the adjusted cash book balance. (7 Marks)
c. Explain TWO reasons for preparing a bank reconciliation statement on a regular basis. (4 Marks)

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  • 10 Marks

FA – May 2017 – L1 – SB – Q6a – Bank Reconciliation

Prepare an adjusted cash book and bank reconciliation statement for Payless Ltd.

The Accountant of Payless Limited, on receiving the bank statement of the business for September 2016, noticed a difference between the bank account balance and the bank column of the company’s cash book. On investigation, the accountant found the following:

(i) The bank statement had been debited in error to the tune of N500,000. The error had been discovered by the bank and would be reversed the next working day.
(ii) Cheques amounting to N840,000 paid into the bank were uncleared and yet to be credited to the business bank account.
(iii) Some cheques amounting to N206,500 paid into the bank were dishonoured.
(iv) Standing order of N100,000 with the bank had been effected by the bank.
(v) Dividends for investments amounting to N45,000 had been received directly into the bank account.
(vi) Some of the business debtors had paid directly into Payless Limited’s bank account an amount of N2,485,000.
(vii) Cheques amounting to N520,000 issued to creditors were recorded in the cash book but were yet to be presented to the bank.
(viii) Bank charges were N1,050.
(ix) Interests received from the bank were N4,255.

The balance on the bank column of the cash book was N3,797,268, and the bank statement balance was N5,203,973.

You are required to:

i. Prepare the adjusted cash book. (6 Marks)
ii. Prepare the bank reconciliation statement. (4 Marks)

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  • 14 Marks

FA – Nov 2023 – L1 – Q3b – Bank reconciliations

Prepare an adjusted cash book and reconcile it with the bank statement for Mensah's account.

b) Mensah is preparing his bank reconciliation for the month of June 2022. His bank statement shows a balance of GHȼ1,824 cash at the bank. The balance on the cashbook in his general ledger is GHȼ645 (credit).

He has identified the following reasons for the difference:

  1. The bank has credited the account in error with GHȼ485, which belongs to another customer.
  2. A cheque drawn, amounting to GHȼ345, has been entered in the cashbook as GHȼ354.
  3. Bank charges of GHȼ320 on the bank statement have not been entered in the cashbook.
  4. Cheques totalling GHȼ664 have been correctly entered on the debit side of the cashbook but have not been paid in at the bank.
  5. A customer’s cheque for GHȼ460 was returned by Mensah’s bank in June as the customer had insufficient funds in his account. Mensah has not recorded the return of the cheque in his records.
  6. Six cheques have not yet been presented at the bank. These are:
Cheque No. Amount (GHȼ)
845763 550
845739 1,540 (see note 7)
846435 480
846502 380
846548 269
846582 200
Total 3,419
  1. Cheque number 845739 was lost and was cancelled. Mensah has not recorded the cancellation of the cheque.

Required:

i) Prepare the adjusted cashbook for Mensah in a format which clearly indicates whether each entry is a debit or credit. (7 marks)

ii) Prepare a reconciliation of the bank statement balance to the adjusted cashbook balance. (7 marks)

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  • 20 Marks

FA – May 2021 – L1 – Q3 – Bank reconciliations

Preparation of an adjusted cash book, bank reconciliation statement, and explanation of the petty cash book operations.

a) On 4 April 2020, Kofi Ntam received his bank statements for the month ended 31 March 2020. The bank statement showed a balance of GH¢417,400 (overdraft) as at 31 March, whilst the cash book showed a balance of GH¢525,990 (credit) as at that date. Upon examination of the cash book and the bank statement, the following were discovered:

  • Bank charges of GH¢2,010 had not been recorded in the cash book.
  • Kofi Ntam exceeded his overdraft limit during the month of March. The bank had therefore charged a penalty of GH¢2,500. This has not been recorded in the cash book.
  • A sum of GH¢12,500 had been wrongly credited to Kofi Ntam’s bank account by the bank.
  • A cheque for GH¢12,300 had been returned by the bank as dishonored. As the cheque had been dishonored, the bank charged Kofi Ntam GH¢150. This has not reflected in the cash book.
  • Cash receipts of GH¢37,400 were posted as cash payment of GH¢47,300 in the cash book.
  • On 21 March, Kofi Ntam deposited an amount of GH¢6,500 into his personal bank account. This was deposited to the business bank account in error by the bank.
  • Standing orders and direct debits of GH¢11,150 had not been posted to the cash book.
  • Customers had deposited GH¢21,700 directly to the bank account. This has not been recorded in the cash book.
  • Receipts of GH¢51,200 deposited to the bank account on 31 March 2020, had not been credited by the bank.
  • The following cheques, drawn on the bank account, had not been presented to the for payment as at 31 March 2020:
Cheque Number Date Cheque was Written Amount (GH¢)
No. 45280 11 March 2020 8,400
No. 45350 28 March 2020 17,400
No. 45370 31 March 2020 36,700

Required:
i) Prepare the adjusted cash book for the month of March 2020.
(8 marks)

ii) Prepare a statement on 31 March 2020 reconciling the adjusted cash book with the bank statement balance.
(6 marks)

iii) Explain TWO (2) reasons for preparing bank reconciliation on a regular basis.
(2 marks)

b) A petty cash book is created to facilitate small payments in a business or organization. It is meant to meet the day-to-day expenses and it is entrusted into the hands of the petty cashier.

Required:
Prepare a brief note to Kofi Ntam explaining how the petty cash book operates.
(4 marks)

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