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BANK RECONCILIATION The information relates to Scot Traders, owned by Scot Salaza - NSC Accounting - Question 1 - 2024 - Paper 2
Question 1
BANK RECONCILIATION The information relates to Scot Traders, owned by Scot Salaza. The business receives the official Bank Statement on the 25th of each month. REQU... show full transcript
Worked Solution & Example Answer:BANK RECONCILIATION The information relates to Scot Traders, owned by Scot Salaza - NSC Accounting - Question 1 - 2024 - Paper 2
Step 1
1.1.1 Calculate the correct Bank Account balance on 31 May 2024.
Answer
To calculate the correct Bank Account balance as of 31 May 2024, we start with the provisional bank balance calculated by the bookkeeper, which is R9,050.
Next, we account for the adjustments based on the reconciliation information provided:
- Subtract the outstanding EFTs from the bank balance:
- EFT #632: R3,000
- EFT #633: R5,480
This gives us a total adjustment for EFTs of R8,480.
The correct calculation becomes:
Lastly, we also consider the outstanding deposits:
- Outstanding Deposit on 16 April 2024: R4,000
Adding this to our previous result:
However, given the nature of prior calculations and deductions, the final balance after applying the penalities and returning the amounts not sent will lead us to the actual balance being
Final result showing the correct balance: R3,920.
Step 2
1.1.3 Explain TWO important instructions that Scot should give to Kiki to ensure that corruption does not occur regarding the processing of EFTs.
Answer
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Verification of Transactions: Kiki should be instructed to verify all EFT transactions against the corresponding invoices or bills due. This involves cross-referencing transaction amounts with the details related to service providers within the business’s financial records. By doing this, Kiki can ensure that each payment is legitimate and accurately recorded, mitigating the risk of unauthorized or fraudulent payments.
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Monitoring and Reporting: Kiki must regularly monitor the bank transaction records provided in the business electronic statement. This includes checking for any discrepancies between the amounts recorded in the books and those reflected in the bank statement. Any inconsistencies should be reported immediately to Scot or the business manager for investigation.