I would like to ask you for help . In exercise given below all balances on bank statement are credit balances. You can't see it but it is true. Cash book opening balance is 240 pounds lower when compared to bank opening balance. Probably this is because of unpresented check from earlier period that was included in cashbook in earlier period. Unfortunately, on bank statement there is no reflection of item that lowered cash book balance in earlier period. We have cheque for 420 in pay out column but this is not 240. Do you think it is the matter of printing error ?
You need to balance the bank and cash book so they both agree.
Credit balances on the bank statement are actually debit balances on the cash book (the other half of the double entry, plus think about it from the banks perspective.....a credit balance on a customer statement shows the Banks liability to that customer).
First you need yo agree the bank v the cash book b/d figure. The bank shows this on the third line so anything before or on that line you can assume has been balanced to the previous cash book entries.
Then cross off the cheques and payments made. Any in the cash book but not in the bank you need to provide for in the adjustments in the bank Rec pro forma.
Any on the bank statement but not in the cash book, yo need yo include in the cash book.
Care with your debits and credits.
The two should agree once you have finished.
I've not tested it, but in face of it I can't see a typo.
Have a go, post your answers and let's see.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Fun play on words in the names, there - as well as Pond (pound) further down there's also Coyne (coin).
However, regardless of anything else, does anyone know how to switch from their current banks to Money Bags Bank Plc? It looks at first glance like they pay a pretty good rate of interest.
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
