Bank Reconciliation Statement Test - 6

The difference between the pass book and cash book will arise from timimg, delay in advice, errors and omissions. whihc may occur from the point of view of cashier of the bank which might lead to difference in the two.

Amount of sales return: Tables:   750/-

Chairs: 1000 

Total Return 1750

Less : Discount (175)

Net Amount  1575/-

As we have received the goods after trade discount, so we will return reversing trade discount.

It may be in form of wrong credits and debits made by the bank in the customer's account and certain direct deposites received and payments made which are not recorded in the cash book but passed in the pass book.

Trial balance is not used for calculating profit it is just used to check accuracy, preparing final accounts and checking balances of ledger. For calculation of profit Trading & Profit & Loss A/c is made.

Cash received is Rs 300000/- and it is increasing so it will be debited . Rent for the year is Rs 240000/- so the income for the year is Rs 240000/- so rent account will be credited as it is income and is increasing and remaining Rs 60000/- is rent received in advance and any incoem which is received in advance is the liability and it is also increasing so it will be credited.

Total Purchases Pencils :  25*30 =   750

Ball Pens : 10*12*20    =  2400

Total = 3150

Less: Trade Discount 10%  = (315)

Net Purchases =  2835

mount of goods returned is Rs (1700-170)= Rs 1530/- as we will record sales return net of discount as the sales where also recorded at the same price.

Assets= Capital + Liabilities

500000= Capital + 50000

Therefore capital should be = 500000-50000 = Rs 450000

Closing capital = opening capital+ revenue - expenses

450000  = 200000+500000-Expenses

Expenses = 700000 - 450000 = Rs 250000/-

There is a time gap in recording the transactions inthe cash book and the pass book.Eg: Cheques deposited but dishonored by the bank in which the cash book is already credited with the amount but cheque has not cleared so bank balance will not increase, Bank interest received by the customer or charged by the bank on certain services will not be known to the customer. he will not pass the same entry in his cash book. Thus these are timing differences which occur.

As Bad debt recovered is profit for the business and it has already been written off earlier , also cash is also received so Cash account is debited and bad debts recovered account is credited. so the above entry is correct.

Amount spent by petty cashier is (100+12+40+80+90+80)= Rs 402

Imprest money is = Rs 500

Cash balance is (500-402) = Rs  98/-

Total purchases :   5*30 = 150

Less Trade discount (10%) : (15)      

Net amount   135/-

We deduct trade discount in order to arrive at purchase return amount  from the total purchases.

Amount used for personal purpose from the business is the drawings which is 1/3 of rs 1500= Rs 500. so drawings account will be debited by Rs 500/-.

There are certain errors and omissions which might occur and the balances in the bank pass book and bank column cash book will not tally therefore we prepare bank reconcialiation statement.

We will decrease stock by the amount of cost of goods sold which is Rs 20000/- and not the sale price because in our stock goods worth Rs 20000/- are sold.

As the transaction says full settlement it means kamal is not going to pay us in future. Rs 200 is given as discount to kamal so kamal's account should not appear in the books of accounts so we credit kamal's a/c by Rs 4000/-.

Stock will decrease by the cost of goods sold i.e Rs 15000/- and not the sale price.

Cash received is total of cost + profit i.e. 15000 + profit (20%) 3000  =  18000/-

As goods are sold for Rs 18000 , so we will receive cash worth Rs 18000/-.

Book value is Rs 80000, Exchange value is Rs 50000/- so loss on exchange of the machinery is Rs 30000/- (80000-50000).

The machine account should be debited with rs 190000/- as the 50000 is already paid by the way of old machine and in block system method Balance of Rs 190000/- becomes payable and thus we will debit the same amount on the machine account.