Question

On 31 May 2019 Interactive Ltd had a cash balance as per company records of $18,000 debit. The bank statement from Community Bank on that date showed a credit balance of $ 16,800. A comparison of the statement with the cash account revealed the following facts:

1.      The bank statement included a debit entry of $120 for managing the company’s account.

2.      Cash sales of $1,882 on 12 May were deposited in the bank. The cash receipts journal entry were incorrectly made for $1,782. The bank credited Interactive Ltd for the correct amount.

3.      Cheque #420 for $1,350 have not yet been presented to the bank.

4.      Cash receipts amounting to $2,000 which were deposited at the bank on 30 May have not yet been recorded as a deposit by the bank.

5.      On 31 May the bank statement showed a dishonoured cheque of $530 that had been issued by a customer to Interactive Ltd.

We then post the appropriate entries in the Cash at Bank ledger as follows.

Debit	Credit
	??

Please select the items from the following menu as the appropriate items to be placed under the Creditcolumn of Cash at Bank ledger.

Select one or more:

i. Unpresented Cheque $1,350

ii. Outstanding Deposit $2,000                                        

iii. Bank Charge $120

iv. Balance as per bank statement $16,600

v. Dishonoured Cheque $530

vi. Bank Interest payment     $120

vii. Error $100

viii. Outstanding Deposit $1,782   

Answer 1

Note -

1. Since, cheque of $ 1,350 is not yet presented to the bank it would added back to the balance in Cash at bank ledger.

2. Since, deposit of $ 2,000 has not yet been recorded by the bank it would be deducted from the balance in Cash at bank ledger.

3. Since, the bank charges charged by the bank has not yet been accounted by Interactive Ltd it would be deducted from the balance in Cash at bank ledger.

4. Cheque issued by customer but dishonoured would be deducted from the balance in Cash at bank ledger.

5. Cash deposits of $ 1,882 have been incorrectly recorded as $ 1,782. The difference amount of $ 100 would be added to the balance of Cash at bank ledger.