NSC Accounting Bank reconciliation: The information below relates to

Question

The information below relates to Woodroffe Stores on 31 May 2016, the financial year-end. The bookkeeper is Jimmy Brown.

REQUIRED:

1.1.1 Calculate the balance as per the Bank Account in the General Ledger according to the Reconciliation Statement prepared by Jimmy. State whether it is favourable or unfavourable.

1.1.2 Provide a reason why Cheque No. 882 should not appear as an outstanding cheque. Also state how this transaction must be corrected.

1.1.3 Cheque No. 1234 is post-dated. How must this cheque be treated at the end of the financial year?

1.1.4 An investigation revealed that the outstanding deposit of R5 000 was stolen by the cashier responsible. The cashier has since resigned and the money will not be recovered.

- List the accounting entries that must be made to take this transaction into account.
- Provide ONE control measure to prevent such incidents in future.

INFORMATION:
Information from the Bank Reconciliation on 31 May 2016:

Favourable bank statement balance              R9 410
Deposits not yet recorded by the bank: 12 May 2016   5 000
                                                       27 May 2016  15 300
Outstanding cheques: No. 882 (30 October 2015)     2 400
                                     No. 996 (21 May 2016)    15 300
Incorrect debit entry on the statement           7 600
Balance as per Bank Account in the General Ledger ?

The information below relates to Woodroffe Stores on 31 May 2016, the financial year-end - NSC Accounting - Question 1 - 2016 - Paper 1

Worked Solution & Example Answer:The information below relates to Woodroffe Stores on 31 May 2016, the financial year-end - NSC Accounting - Question 1 - 2016 - Paper 1

1.1.4 An investigation revealed that the outstanding deposit of R5 000 was stolen by the cashier responsible. The cashier has since resigned and the money will not be recovered.

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