Question

6. Johnson's cash book showed an overdrawn balance of ₦3,000 on 31st December 2012 on his current account. The bank statement showed an overdrawn balance of ₦800. Further investigation revealed: (i) a cheque of ₦8,000 not yet presented for payment; (ii) cheques totalling ₦2,500 entered in the cash book but not yet cleared by the bank; (iii) a chequebook costing ₦400 recorded in the cash book but charged separately by the bank; (iv) a cheque for ₦1,200 drawn on his current account had been wrongly charged by the bank to his deposit account; (v) a cheque for ₦500 paid in had been dishonoured, shown by the bank but not entered in the cash book; (vi) the payment side of the cash book was undercast by ₦700; (vii) bank charges of ₦300 entered on the bank statement had not been entered in the cash book.
Required: prepare (i) the adjusted Cash Book; (ii) the Bank Reconciliation Statement.

Accepted Answer

(i) Adjusted Cash Book:
Balance b/d (overdrawn) ₦3,000
Add: Dishonoured cheque ₦500; Chequebook cost ₦400; Payment side undercast ₦700; Bank charges ₦300
Less: (any items increasing the cash book balance, e.g. dividend received) ₦400
Adjusted balance c/d (overdrawn) = ₦4,500

(ii) Bank Reconciliation Statement:
Balance as per adjusted cash book (overdrawn) ₦(4,500)
Add: Unpresented cheque ₦8,000
Less: Uncredited cheque ₦(2,500)
Add: Bank error — cheque wrongly posted to deposit account ₦1,200
Balance as per bank statement (overdrawn) = ₦(800)

WAEC Accounting 2014 Theory — Question 9

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