Month: May 2024

Which of the following statements about bank reconciliations are correct?

1. All differences between the cash book and the bank statement must be corrected by means of a journal entry.
2. In preparing a bank reconciliation, lodgements recorded before date in the cash book but credited by the bank after date should reduce an overdrawn balance in the bank statement.
3. Bank charges not yet entered in the cash book should be dealt, with by an adjustment to the balance per the bank statement.
4. If a cheque received from a customer is dishonoured after date, a credit entry in the cash book is required.

Select ONE answer:

1. Was credited to a non-current assets account
2. Was debited to the purchases account
3. Was debited to the equipment account
4. Was debited to the correct account but with the wrong amount

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Notcorrect
2. Correct – In preparing a bank reconciliation, uncredited lodgements reduce an overdrawn balance in the bank statement. If a cheque received from a customer is dishonoured after date, a credit entry in the cash book is required to reinstate the debt. Not all differences between the cash book and the bank statement must be corrected by means of a journal entry, since some items appear in the bank reconciliation only (eg errors by the bank, unpresented cheques and uncredited lodgements). Bank charges not yet entered in the cash book should be dealt with by updating the cash book, not by making an adjustment to the balance per the bank statement.
3. Not correct
4. Not correct

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The balance on Alex’s cash book is £27 overdrawn.

His bank statement shows that he is £625 in credit.

When Alex does a reconciliation, he finds that there are unpresented cheques of £327, unposted direct debits of £200, and a customer has paid £525 directly into his bank account.

His cash book should have a debit balance of???

Select ONE answer:

1. £298
2. £352
3. £752
4. £952

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct –> -27 – £200 + £525
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

An error of principle would occur if plant and machinery purchased….?

Select ONE answer:

1. Was credited to a non-current assets account
2. Was debited to the purchases account
3. Was debited to the equipment account
4. Was debited to the correct account but with the wrong amount

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Notcorrect
2. Correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Two errors have been found in Alex plc’s accounts:

1  The credit balance of £420 in Ahmed’s payables ledger account had been set off against his account in the receivables ledger. No entries had been made in the receivables and payables control accounts.

2  Thomas’s personal account balance of £240 had been removed from the receivables ledger as an irrecoverable debt. No entry had been made in the receivables control account

The journal that corrects both these errors is?

Select ONE answer:

1. Debit Payables control £420, Debit Irrecoverable debts expense £240, Credit Receivables control £660
2. Debit Receivables control £660, Credit Irrecoverable debts expense £240, Credit Payables control £420
3. Debit Payables control £660, Credit Irrecoverable debts expense £240
4. Debit Receivables control £420, Debit Irrecoverable debts expense £240, Credit Payables control £660

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.