2020 SMSS 3N POA EOY P2 Q3

2020 SMSS 3N POA EOY P2 Q3

3 The cash at bank column of Noraini’s cash book and bank statement for the month of August 2020 were as follow:

Cash at bank account

Date

Particulars

Debit

Credit

Balance

2020

 

$

$

$

Aug 1

Balance b/d

  

11 300

Dr

4

Sales revenue (Cheque 0301)

18 300

 

29 600

Dr

10

Trade payable-Xin Hui

 

6 800

22 800

Dr

11

Trade receivable-E&E Supplies

2 300

 

25 100

Dr

14

Utilities (Cheque 0303)

 

425

24 675

Dr

18

Trade receivable-Ben & Sons Co

5 230

 

29 905

Dr

21

Trade payable-Hashim

 

2 700

27 205

Dr

      

Sep 1

Balance b/d

  

27 205

Dr

Bank Statement for the month of August 2020

Date

 

Payments

Receipts

    Balance

2020

 

$

$

$

Aug 1

Balance b/d

  

11 600

Cr

2

Cheque 0300

300

 

11 300

Cr

10

Cheque 0302

 

18 300

29 600

Cr

12

Interest income

 

110

29 710

Cr

16

Cheque 0303

425

 

29 285

Cr

20

Cheque 0304

 

5 230

34 515

Cr

21

Credit transfer: Lincoln

1 130

 

33 385

Cr

25

Cheque 0304

5 230

 

28 155

Cr

31

Bank charges

80

 

28 075

Cr

REQUIRED

a. Update the cash book (cash at bank) at 31 August 2020 and bring down the new balance.

[6]

b. Prepare the bank reconciliation statement as at 31 August 2020.

[5]

c. Give one purpose of preparing bank reconciliation.

[1]

d. Give two purposes of internal controls over cash in a business.

[2]

[TOTAL 14]

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  • Allow the business to calculate the accurate bank balance after updating the Cash at Bank account.
  • To identify errors in the bank statement or cash at bank account.
  • It acts as a deterrence against fraud.

  • safeguard assets of the business
  • ensure business transactions are recorded objectively and on a timely basis
  • ensure that the business complies with laws and regulation

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