Gurjit operates as a trader. In January 2024, these transactions occurred.
January 4 Cash sales, $640, were banked straight into the bank account
7 Paid Sandy $551 by credit transfer after deducting 5% cash discount
13 Paid wages in cash, $120
19 Received $415 by cheque from Uma
21 Paid Viraj $194 by telephone transfer, settling an invoice of $200 in full
25 Withdrew $100 cash from the bank for business use
(a)[10]
Complete Gurjit’s cash book on the page opposite. Balance the cash book and carry forward the balances to 1 February 2024.
(b)[3]
Put a tick (✓) in the appropriate column in the table to show whether each item would be entered in the cash book update or shown in the bank reconciliation statement.
(c)[5]
Advise Gurjit on whether he ought to make the changes above. Support your answer with points both for and against making these changes.
(d(i))[1]
State what is meant by the term bank overdraft.
(d(ii))[1]
State what is meant by the term bank charges.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme.