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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 can use the following approach:
- Start with the provisional bank balance reported by the bookkeeper: R9 050.
- Adjust for the outstanding EFT:
- Unfavourable balance as per Bank Statement: -R1 550.
- Outstanding deposits: +R4 000.
- Outstanding EFTs: subtract the amounts for EFT No. 632 (R1 400) and No. 633 (R5 480).
Thus, the calculation can be summarized as:
Therefore, the correct Bank Account balance on 31 May 2024 is R3 920.
Step 2
Prepare the Bank Reconciliation Statement on 31 May 2024
Answer
To prepare the Bank Reconciliation Statement:
Bank Reconciliation Statement as at 31 May 2024
| Description | Amount (R) |
|---|---|
| Balance as per Bank Statement | (1,550) |
| Plus: Outstanding Deposits | 4,000 |
| Less: Outstanding EFT 632 | (1,400) |
| Less: Outstanding EFT 633 | (5,480) |
| --------------------------------- | ------------- |
| Adjusted Balance | 3,920 |
This reconciliation verifies the correct 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 Process: Kiki should confirm all payments by referring to the correct accounts and verifying transaction details with the service providers or the business's bank. She should utilize a bank confirmation letter where necessary.
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Authorization and Monitoring: Kiki must ensure that she monitors the bank transaction records regularly and reports daily to Scot about any unusual activity. Additionally, she must protect all passwords and codes needed for online banking.