At 31 December the balance on a firm’s bank statement was £1,000 overdrawn. At the same date, outstanding cheques amounted to £3,000, outstanding lodgements amounted to £5,000 and there was a dishonoured cheque from a customer of £500 entered on the firm’s bank statement but not yet entered in the bank account in the firm’s ledger.
The balance brought down on the bank account in the firm’s ledger was?
Select ONE answer:
- £500 debit
- £500 credit
- £1,000 credit
- £1,500 debit
Show your workings to arrive at your answer, and explain and justify your reasons:
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This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 1
- Correct
Computation of Correct Ledger Balance as at 31 December
Balance per bank statement -£1,000
Outstanding lodgements £5,000
Cheques not presented -£3,000
Balance per ledger (corrected) £1,000However, as the dishonoured cheque has not yet been entered in the ledger, the actual ledger balance exceeds the correct ledger balance by £500. Therefore, the actual ledger balance is £500 debit.
- Not Correct
- Not correct
- Not correct
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