On 31 March 2025, Zac’s bank statement showed an overdraft of $1665$, whereas the bank column in his cash book displayed a debit balance of $825$ on that same date.
After checking, he found that the following items were listed on his bank statement but had not been entered in his cash book.
The following items were entered in his cash book but were absent from his bank statement.
(a)[7]
Bring Zac’s bank columns up to date. Balance the account, then carry down the balance at 1 April 2025.
(b)[5]
Prepare a bank reconciliation statement as at 31 March 2025.
(c)[5]
Advise Zac on whether he ought to prepare a bank reconciliation statement every three months. Justify your answer by weighing up the advantages and disadvantages of doing this.
(d)[1]
State the meaning of the term ‘dishonoured cheque’.
(e)[2]
Complete the table below to show the journal entry needed to record the dishonoured cheque in Zac’s accounts. A narrative is not required.
Worked solution & mark scheme
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