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 | 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 | 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]
- 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