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Calculate the correct balance of the Bank Account in the General Ledger on 31 July 2016 - NSC Accounting - Question 1 - 2017 - Paper 1
Question 1
Calculate the correct balance of the Bank Account in the General Ledger on 31 July 2016. State if this balance is favourable or unfavourable. Provisional Bank balan... show full transcript
Worked Solution & Example Answer:Calculate the correct balance of the Bank Account in the General Ledger on 31 July 2016 - NSC Accounting - Question 1 - 2017 - Paper 1
Step 1
Calculate the correct balance of the Bank Account
Answer
To find the correct balance in the Bank Account, we start with the provisional bank balance of R16,785 and make the necessary adjustments as follows:
- Add Cheque No. 186:
- Provisional balance: R16,785 + R450 = R17,235
- Add Interest Income:
- R17,235 + R285 = R17,520
- Deduct Bank Charges:
- R17,520 - R950 = R16,570
- Deduct Correction for Cheque No. 374:
- R16,570 - R3,600 = R12,970
- Deduct Theft of Cash:
- R12,970 - R37,800 = -R24,830
Thus, the correct bank balance is R24,830. Since this balance is negative, it is deemed unfavourable.
Step 2