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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. REQ... 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
Calculate the correct Bank Account balance on 31 May 2024.
Answer
To calculate the correct Bank Account balance, we will take the provisional bank balance calculated by the bookkeeper and adjust it based on the outstanding items. Starting with the provisional balance of R9 050:
- Subtract the unfavourable balance (R1 550).
- Add outstanding deposits (R4 000).
- Subtract the outstanding EFTs (R8 000 + R5 480).
Therefore, the calculation will be:
The correct Bank Account balance on 31 May 2024 is R3 920.
Step 2
Prepare the Bank Reconciliation Statement on 31 May 2024.
Answer
The Bank Reconciliation Statement for 31 May 2024 will summarize the discrepancies between the Bank Statement and the General Ledger. The statement will include the following:
- Bank Statement Balance: R4 170 (As per General Ledger)
- Add Outstanding Deposits: R4 000
- Less Outstanding EFTs: R8 000 + R5 480
- Adjusted Balance:
The statement is summarized as follows:
Bank Statement Balance: R4 170
Add: Outstanding Deposits: R4 000
Less: Outstanding EFTs: R13 480
Adjusted Bank Account Balance: R3 920
This shows the reconciled Bank Account balance.
Step 3
Explain TWO important instructions that Scot should give to Kiki to ensure that corruption does not occur with regard to the processing of EFTs.
Answer
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Verification of Transactions: Kiki should check the details of payments before processing any EFT. This involves verifying with appropriate documents and confirming the authenticity of all recipients, including references to invoices or service providers.
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Regular Monitoring: Kiki must conduct regular checks of the bank transaction records and compare these with the corresponding documents. This will ensure any discrepancies can be identified and dealt with promptly, reducing the risk of unauthorized transactions.