Chapter 12

Question 1

How often should A reconciliation of the balance in the cashbook to the balance on the bank statement take place

Answer 1

all well-run businesses should carry out on a regular, at least monthly basis

Question 2

What figure goes into the SFP?

Answer 2

The balance in the cash account in the general ledger goes into the SGP

NOT NECC same as figure on the bank statement

Question 3

What causes differences between the cashbook balance and the bank statement balance

Answer 3

Timing differences (cheques not presented/lodged at bank
Bank errors

Cashbook errors
Standing orders/Direct Devit not recorded in cashbook
Bank charges/interest not recorded in cashbook
Dishonoured cheques (bouncing) not written off in cashbook

Inc and after cashbook errors, these items should be written up or adjusted in the cash book

Question 4

What is an unpresented cheque

Answer 4

A cheque written by the business, not yet paid into the bank by the supplier.

Question 5

What is an uncleared lodgement

Answer 5

a cheque received by the business not yet credited by the bank

Question 6

Bank eror

Answer 6

A bank error would remain as a difference until the bank corrects the error