CHAPTER 11

Question 1

Bank reconciliation

Answer 1

Comparison between balance in BGLA & balance appearing in bank statement

Question 2

Cause of difference

Answer 2

• Errors
• Bank charges/interest
• Timing difference

Question 3

Bank statement sent by bank to their receivable or payable?

Answer 3

BOTH - bank statement sent to short-term receivable & payable

It can be produced monthly, weekly, daily

Question 4

Factor for frequency of bank reconciliations : Volume of transaction

Answer 4

More transaction occur, more possibility of error, so more frequent reconciliation is needed

Question 5

Factor for frequency of bank reconciliations : Other controls

Answer 5

Very few checks on cash other than reconciliation (example : agreeing receipts to remittance advices) , then more frequent BR is needed

Question 6

Factor for frequency of bank reconciliations : Number of bank accounts

Answer 6

If company has several active bank accounts, impractical to perform BR often so takyah ah susahkan diri je

Question 7

Factor for frequency of bank reconciliations : Cash flow

Answer 7

Company is very close to overdraft limit, frequent BR is necessary

Question 8

Computer controls over cash

Answer 8

1) Casting
- programmed to add up correctly
- avoid errors of overcast & undercast that occurs with manual accounting system

2) Updating from ledger
- computer automatically update from TR when money is received