Question 3 John Carter’s Cash Book (Bank columns only) for the month of August 2020 was as follows: $ $ August 1 Balance b/d 4 000 August 5 Wages 600 8 Cash deposit 600 10 Stationery 300 14 Ann Palmer 500 17 Watson Pastry 800 20 Roy Blake 1 520 23 Della Ltd 400 26 Sara Gray 1 840 29 Green Supply 1 680 31 Balance c/d 4 680 8 460 8 460 The following Bank Statement was received in early September 2020 Payments Receipts Balance 2020 $ $ $ August 1 Balance b/d 4 000 5 Standing order 30 3 970 9 Wages 600 3 370 15 Stationery 300 3 070 16 Cash deposit 600 3 670 18 Ann Palmer 500 4 170 19 Karen Jackson 570 4 740 20 Dishonoured cheque 380 4 360 21 Bank charges 60 4 300 24 Direct transfer: A. Dole 200 4 500 30 Watson Pastry 800 3 700 Required: a. Bring the cash book up–to-date, starting with the balance at 31 August 2020. b. Prepare a statement using its correct title to reconcile the difference between your amended Cash Book balance and the balance in the Bank Statement on August 31, 2020.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 11MC

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Question 3

John Carter’s Cash Book (Bank columns only) for the month of August 2020 was

as follows:
			$				$
August 1	Balance b/d	4 000	August 5	Wages	600
8	Cash deposit	600		10	Stationery	300
14	Ann Palmer	500		17	Watson Pastry	800
20	Roy Blake	1 520		23	Della Ltd	400
26	Sara Gray	1 840		29	Green Supply	1 680
					31	Balance c/d	4 680
			8 460				8 460
The following Bank Statement was received in early September 2020
			Payments	Receipts	Balance
2020				$		$	$
August 1	Balance b/d					4 000
5	Standing order		30			3 970
9	Wages		600			3 370
15	Stationery		300			3 070
16	Cash deposit				600	3 670
18	Ann Palmer				500	4 170
19	Karen Jackson				570	4 740
20	Dishonoured cheque		380			4 360
21	Bank charges		60			4 300
24	Direct transfer: A. Dole			200	4 500
30	Watson Pastry		800			3 700

Required:

a. Bring the cash book up–to-date, starting with the balance at 31 August 2020.

b. Prepare a statement using its correct title to reconcile the difference between your amended Cash Book balance and the balance in the Bank Statement on August 31, 2020.

Explain the following terms:

i.	Dishonoured cheques
ii.	Credit transfer
iii.	Standing order
iv.	Un-presented cheques
v.	Late lodgements

Definition Definition Financial journal in which only cash-related transactions are recorded. Cash transactions are posted chronologically in the cash book, which is also called a subsidiary book. All the cash receipts are recorded on the debit side and all the cash payments are recorded on the credit side. An important point to remember is that the cash book never shows a credit balance; only a debit balance is shown in the cash book.

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