1.1 Bank reconciliation: 1.1.1 Show the entries that must be recorded in the Cash Journals by completing the table in the ANSWER BOOK - NSC Accounting - Question 1 - 2018 - Paper 1

The Bank Account balance is calculated as follows:

Initial balance as per Bank Statement: $18,450

Adding outstanding deposits: +$12,675

Less outstanding cheques: -$25,000

Thus, the balance in the Ledger on 30 April 2018:

$18,450 +$12,675 - $25,000 =$30,975 (negative shows bank overdraft).

The Bank Reconciliation Statement includes the following details:

Balance as per Bank Statement: $41,537

• Add: Outstanding Deposit: $12,675
• Less: Outstanding Cheques: [Various items total $25,000]

Balance as per Ledger Account: $30,975. Thus, the reconciled balance as of 30 April 2018 can be presented succinctly with all figures confirmed.

The internal auditor identified two significant problems:

1. Theft/Fraud/Internal control measures are lacking: One instance shows an amount of $25,000 missing, which can indicate poor tracking and internal controls.
2. Rolling/late depositing of cash: An outstanding deposit of $12,675 is noted to be deposited late, which implies inefficiency in cash management.

To tackle these issues, the following advice is proposed:

1. Create a policy for regular deposits: Establish a routine for cash deposits to minimize outstanding balances, thus reducing the chance of theft.
2. Implement a dual-check system: Ensure that two individuals are involved in the cash handling and reconciliation process to improve accountability and oversight.

The advantages of using EFT include:

1. Cost-effectiveness: EFT reduces the need for physical checks, lowering the costs associated with printing and payment processing.
2. Speed: Transfers through EFT are typically quicker than clearing cheques, allowing for faster settlement of payments to suppliers, which can enhance supplier relationships.