Question Tag: Cash Book

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  • 15 Marks

FA – Nov 2012 – L1 – SB – Q4 – Financial Statements Preparation

Prepare a bank cash book, retained earnings, and statement of financial position for Fehintola Enterprises.

On 1 January 2011, Mrs. Fehintola decided to invest her retirement benefit of N1,000,000 in the wholesale business of Fehintola Enterprises. She lodged the amount into the business bank account and paid for the following by cheque:

  • Motor Van: N600,000
  • Warehouse fittings: N340,000
  • Rent: N12,500

Proper accounting records were not kept, but the financial position as at 31 December 2011 revealed the following:

  • Inventories of goods in the warehouse: N150,000
  • Trade receivables: N125,000
  • Cash at Bank: N751,750
  • Trade payables for supplies: N100,000
  • Accrued rent: N15,000

The following were paid for by cheque:

  • Electricity bill at N2,500 per quarter up to 31 March 2012
  • Suppliers: N1,500,000
  • Personal expenses: N150,000

On 31 December 2011, it was agreed that the Motor Van and Warehouse fittings should be valued at N560,000 and N320,000, respectively.

Required:

a. Prepare the Bank Cash Book (5 Marks)
b. Prepare a statement showing the retained earnings for the year ended 31 December 2011 (5 Marks)
c. Prepare the Statement of Financial Position as at 31 December 2011 (5 Marks)

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  • 1 Marks

FA – Nov 2012 – L1 – SA – Q8 – Bank Reconciliation

Identifying the cause of discrepancy between the cash book and the bank statement.

Which of the following does NOT cause a discrepancy between cash book and bank statement balances?

A. Direct credit found in the bank statement
B. Credit sales posted to the debit side of the cash book (bank column)
C. COT and other finance costs credited in the bank statement
D. The company’s credit balance in the bank statement
E. Subscription paid by the bank on behalf of the company’s manager and debited in the bank statement

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  • 20 Marks

FA – Nov 2015 – L1 – SB – Q2 – Bank Reconciliation

Preparing an adjusted cash book and bank reconciliation for a club with discrepancies.

a. Bank Statement is a mirror of any entity’s cash book, and they are expected to have equal balances at any point in time. However, this is not usually the case. Based on the ongoing statement, state five reasons that could cause the bank statement balance to differ from the cash book balance. (5 Marks)

b. The Treasurer of Young Star Social Club (YSSC) did not keep proper records for receipts and payments for the month of December 2014, causing mistrust among members. He has decided to seek your assistance to prepare a bank reconciliation statement before presenting the account to the club members.

The bank statement and the receipts and payments cash book of the club on December 31, 2014, showed a credit balance of N205,000 and N2,078,000, respectively. A comparison of the bank statement with the receipts and payment cash book of the club revealed the following:

i. Cheque drawn but not presented N3,160,000
ii. Amount lodged in the bank but not credited N725,000
iii. Entries in bank statement not recorded in receipts and payments cash book:

  • Standing order for loan refund N35,000
  • Interest received on deposit account N18,000
  • Bank charges N15,000
  • Cheque paid-in but returned with “refer to drawer” N120,000

Required:
i. Prepare an adjusted cash book as at December 31, 2014; (8 Marks)
ii. Prepare the Bank Reconciliation Statement showing the balance on December 31, 2014. (7 Marks)

(Total 20 Marks)

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  • 1 Marks

FA – Nov 2015 – L1 – SA – Q16 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

This question identifies the items that should be included in an adjusted cash book.

Which of the following should be included in the adjusted cash book?
A. Cheque issued, presented and cashed
B. Opening bank balance
C. Bank charges and commission
D. Bank deposit
E. Cash payment made by the firm

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  • 1 Marks

FA – Nov 2015 – L1 – SA – Q12 – Recording Financial Transactions

This question identifies which document is not used to update a Cash Book.

Which of the following is NOT a source document used to update a Cash Book?
A. Cheque stub
B. Payment voucher
C. Receipts
D. Paying-in-slip
E. Debit note

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  • 20 Marks

FA – May 2018 – L1 – SB – Q1 – Recording Financial Transactions

Prepares a three-column cash book, ledger accounts, and a trial balance for a sole trader.

On January 1, 2016, Mr. Wale commenced business as a sole trader with N10,000,000, which he paid into the business bank account. He purchased a van for N6,000,000 from Mallam Tanko and paid half of the amount due by cheque on January 2, 2016. The following transactions took place in the month of January 2016:

  • Jan 2: Paid rent of N500,000 for two years in advance for the business premises by cheque.
  • Jan 3: Purchased goods worth N2,000,000 from Granules Limited and paid half of the amount by cheque so as to enjoy a cash discount of 4%.
  • Jan 4: Purchased furniture for N200,000 and computers for N250,000 by cheque.
  • Jan 6: Conducted sales promotion for one month, offering cash and trade discounts as follows:
    • 5% discount on cash sales
    • 10% trade discount for sales above N500,000
  • Jan 8: Sold goods for cash to Sanders Limited for N340,000.
  • Jan 10: Sold goods to Miles and Stone Limited for N1,000,000, who paid 75% by cheque.
  • Jan 12: Mr. Bobby purchased goods valued at N100,000 and paid in full by cash.
  • Jan 13: Deposited N300,000 cash in the bank.
  • Jan 15: Paid salaries by cheque (N80,000) and electricity bill by cheque (N10,000).
  • Jan 20: Paid the sum of N1,750,000 to Mallam Tanko for the van by cash.
  • Jan 27: Mr. Wale withdrew N10,000 for personal expenses.
  • Jan 30: Cash sales of N40,000 were made.

Required:
a. Prepare a three-column cash book. (6 Marks)
b. Prepare the ledger accounts for the transactions. (8 Marks)
c. Prepare a trial balance as at January 31, 2016. (6 Marks)

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  • 1 Marks

FA – Nov 2021 – L1 – SA – Q15 – Bank Reconciliation

This question focuses on which bank reconciliation items should not be adjusted in the cash book.

Which of the following bank reconciliation items should NOT be added or subtracted from the cash book balance to determine the adjusted bank balance?
A. Bank service charges
B. Unpresented cheques
C. Direct transfer
D. Cash book error
E. Value added tax charges

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  • 1 Marks

FA – Nov 2021 – L1 – SA – Q13 – Accounting Concepts

This question requires calculating the amount of cash paid out during a period.

In a cash book, the opening balance was N70,600, closing balance was N86,600 and the total cash received during the period was N180,000. What was the amount of cash paid out during the period?
A. N89,000
B. N98,000
C. N146,000
D. N164,000
E. N186,000

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  • 1 Marks

FA – Nov 2021 – L1 – SA – Q11 – Trial Balance

This question evaluates the treatment of discounts in the cash book and their impact on the trial balance.

If the total discount allowed in a cash book was N52,000 and the total discount received was N66,700, which of the following is TRUE concerning the two discounts?
A. They should not appear in the trial balance as they were already either received or paid out
B. They must be balanced in the cash book and the difference taken to the receivables
C. They must not appear in the general ledger
D. They must be balanced in the cash book and the difference taken to the trial balance
E. They should not be balanced in the cash book before being taken to the trial balance

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  • 1 Marks

FA – Nov 2021 – L1 – SA – Q4 – Accounting Concepts

This question relates to the ledger entry for a vehicle purchased on cash.

Success Motors bought three Toyota Jeeps on cash at the cost of N16,000,000. On debiting the vehicle account, the corresponding credit for the purchase will appear in the:
A. Sales day book
B. Purchase day book
C. Payable account
D. Cash book
E. Purchases account

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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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  • 20 Marks

FA – Nov 2019 – L1 – SB – Q3 – Bank Reconciliation

Explains the difference between a bank statement and a bank reconciliation statement.

a)

The accounts clerk of Jide Electronics is unsure of the difference between a bank statement and a bank reconciliation statement and has asked for your assistance in this direction.
Required: Explain the difference between a bank statement and a bank reconciliation statement.             (2 Marks)

b)

She has provided you with the following summary of banking transactions for the period under review:

  1. A cheque amounting to N280,000 received and paid into the bank was not credited by the bank until after September 30, 2019;
  2. The cash book balance of the business showed an overdraft of N200,000, while the bank statement balance on the same date indicated that the business had a credit balance of N1,930,000;
  3. A customer made a direct credit transfer into the business bank account amounting to N1,140,000 in settlement of trade debt, and this was not known until after the receipt of the bank statement;
  4. A cheque amounting to N670,000 for the purchase of goods was posted into the cash book as N760,000;
  5. A cheque of N1,230,000 dishonoured by the bank remained unreversed in the cash book;
  6. Cheques amounting to N2,680,000 issued to a supplier were presented to the bank on October 08, 2019;
  7. The bank statement revealed that there was a dividend of N580,000 received as investment income;
  8. The bank transferred the sum of N200,000 to ICAN, being the payment on a standing order for annual subscription of staff who were writing professional examinations;

Required:

i. Prepare the adjusted cash book. (11 Marks)
ii. Starting with the balance as per bank statement, prepare the bank reconciliation statement for the month ended September 30, 2019. (7 Marks)

 

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  • 1 Marks

FA – Nov 2019 – L1 – SA – Q18 – Bank Reconciliation

Identify what will not affect the agreement between the cash book balance and the bank statement balance.

Which of the following will not affect the agreement of the cash book balance and the bank statement balance?

A. Dishonoured lodgement
B. Cash payments
C. Bank charges
D. Standing order for the payment of annual subscription
E. Error in the bank statement

 

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  • 1 Marks

FA – May 2017 – L1 – SA – Q1 – Bank Reconciliation

Identifies why a bank reconciliation statement is prepared, focusing on error detection and reconciliation of differences.

Which of the following justifies why bank reconciliation statement is prepared?

(i.) Detection of error in the organisation’s cash book

(ii.) Reconciliation of differences arising from delay in clearance of cheques

(iii.) Discourage embezzlement of fund by staff

(iv.) Resolve problems highlighted by the trial balance

A. (i), (ii), (iii) and (iv)
B. (ii)
C. (i) and (ii)
D. (ii), (iii) and (iv)
E. (i), (ii) and (iii)

 

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  • 1 Marks

FA – May 2016 – L1 – SA – Q10 – Bank Reconciliation

A question on interpreting the meaning of a credit balance in the cash book.

The bank column in the cash book shows a credit balance of N50,000. This means:
A. A total payment of N50,000
B. A gross receipt of N50,000
C. A balance of N50,000 in the bank
D. An overdraft of N50,000
E. A balance of N50,000 cash

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  • 1 Marks

FA – MAY 2015 – L1 – SA – Q19 – Bank Reconciliations

Calculate the bank statement balance from the adjusted cash book balance.

Question:
The balance as per bank statement is:
A. N39,500
B. N41,500
C. N139,500
D. N179,500
E. N239,500

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  • 1 Marks

FA – MAY 2015 – L1 – SA – Q18 – Bank Reconciliations

Calculate the adjusted cash book balance from given data.

Use the following information to answer questions 18 and 19:
Balance as per cash book: N220,000
Dishonored cheques: N100,000
Bank charges: N10,500
Uncredited cheques: N70,000

The adjusted cash book balance is:
A. N100,000
B. N109,500
C. N155,500
D. N209,500
E. N309,500

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  • 1 Marks

FA – MAY 2015 – L1 – SA – Q8 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Identify the book that serves as both a subsidiary book and a ledger.

Which of these books of account could be classified as a subsidiary book as well as a ledger?
A. Sales day book
B. Cash book
C. General ledger
D. Nominal ledger
E. Personal ledger

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  • 4 Marks

FA – Mar/July 2020 – L1 – SB – Q2b – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Definition of books of prime entry and examples maintained by entities.

Define books of prime entry and list FOUR books of prime entry that could be maintained by an entity. (4 Marks)

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  • 1 Marks

FA – Mar/July 2020 – L1 – SA – Q15 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Identifying books of prime entry

Which of the following are books of prime entry?
(I) Sales day book
(II) Payables ledger
(III) Journal
(IV) Cash book
A. I, II & IV
B. I, II & III
C. I, III & IV
D. II, III & IV
E. I, II, III & IV

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