Question
The cash book at December of Tatoo Trading, showed debit balance of
RM but the bank statement of the same date showed RMcredit The
following reasons were noted:
i Bank interest RM of an earlier overdraft had been charged by the bank on
December.
ii On December, a cheque of RM which had been paid into the bank, but
was returned unpaid because of lack of fund.
iii. An amount of RM paid into the bank on November had not yet appeared
on the bank statement.
iv On December, a sum of RM paid into the bank had been entered in the
cash book as RM
v On December, the bank has made a banker's order payment for insurance
of RM which has not been recorded by Mohan.
vi On December, the bank account received a direct transfer of RM owed
to Mohan from Hasan.
vii. On December, a cheque issued for RM had not been presented for
payment.
Required:
a Prepare the necessary additional entries in the Cash Book, and show a
corrected balance.
b Prepare a Bank Reconciliation Statement as at December beginning
with Cash Book balance at the end of the month.
