A Accounting

Revised Balance on the cash book (video below)

XYZ Co uses a computer package to maintain its accounting records. A printout of its cash book for the month of May 20X5 was extracted on 31 May and is summarised below.

$ $
Balance b/d 137 Payments 1,492
Receipts 1,573 Balance c/d 218
1,710 1,710

The company’s chief accountant provides you with the following information.

a)Bank charges of $315 shown on the bank statement have not been entered in the company’s cash book.

b)Three standing orders entered on the bank statement have not been recorded in the company’s cash book: a subscription for trade journals of $26, an insurance premium of $180 and a business rates payment of $1,086.

c)A cheque drawn by XYZ Co for $347 and presented to the bank on 26 May has been incorrectly entered in the cash book as $468.

After correcting the errors above, what is the revised balance on the cash book?

Answer

CASH BOOK
$ $
20X5 20X5
31-May Balance b/d 218 31-May Bank charges 315
Error $(468 – 347) 121 Trade journals 26
Balance c/d 1,268 Insurance 180
         – Business rates 1,086
1,607 1,607
Credit Balance 1,268


Note: if you cannot see any videos above, please click this link @ https://youtu.be/pX7hv4GZJ2U

Share