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BANK RECONCILIATION The information relates to Mango Traders for June 2023 - NSC Accounting - Question 1 - 2023 - Paper 2
Question 1
BANK RECONCILIATION The information relates to Mango Traders for June 2023. The business uses the official bank statement which is received on the 26th of each mont... show full transcript
Worked Solution & Example Answer:BANK RECONCILIATION The information relates to Mango Traders for June 2023 - NSC Accounting - Question 1 - 2023 - Paper 2
Step 1
Calculate the correct totals for the Cash Journals
Answer
To calculate the correct totals for the Cash Journals on 30 June 2023:
Cash Receipts Journal:
- Initial total: R81 300
- Adjustments:
- Transaction fees (R540) need to be removed from total receipts.
- Corrected total: R81 300 - R540 = R80 760.
Cash Payments Journal:
- Initial total: R80 620
- Adjustments:
- The payment to Ace Stationers (EFT 816) must be accounted (R4 700).
- Corrected total: R80 620 + R4 700 = R85 320.
Thus,
- Total Cash Receipts = R80 760
- Total Cash Payments = R85 320.
Step 2
Step 3
Prepare the Bank Reconciliation Statement on 30 June 2023
Answer
The Bank Reconciliation Statement will include the following:
Bank Reconciliation Statement as of 30 June 2023
| DETAILS | DEBIT | CREDIT |
|---|---|---|
| Balance as per bank statement | R11 240 | |
| Outstanding deposits | R30 000 | |
| Outstanding EFTs | R7 400 | |
| Incorrect amounts (if any) | R540 | |
| Balance as per bank account | R49 100 |
The usual layout has a starting balance from the bank statement and then adds outstanding deposits while accounting for outstanding payments.
Calculated Balance = Bank balance + Outstanding deposits - Outstanding withdrawals.
Step 4
Explain TWO strategies that the business can use to address the problem of missing cash
Answer
To address the problem of missing cash, the business can implement the following strategies:
-
Segregation of Duties: Responsibilities for cash handling should be divided among different employees. One person should receive cash, another should process payments, and a third should record transactions. This separation helps to minimize risks of theft or error.
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Implement Security Measures: Enhance the security around cash handling and transport. Install security cameras, use secure deposit methods (like locked cash boxes or safes), and train employees on proper cash handling procedures. Regular audits and oversight can also ensure integrity.