Question

 

Q1-A.

What is the bank reconciliation? why is it important for companies to prepare bank reconciliation periodically?

Q1-B

A company that uses a perpetual inventory system made the following cash purchases and sales. There was no beginning inventory.

January 1:	Purchased 30 units at SAR11 per unit
February 5:	Purchased 30 units at SAR 13 per unit
March 16:	Sold 50 Units for SAR 15 per unit

A.Prepare general journal entries to record the March 16 sale using the

1. FIFO inventory valuation method.
2. LIFO inventory valuation method.
3. Weighted average valuation method.

Q1-C

What is the cost of goods sold and the gross margin for each method?

Answer 1

1. A- a bank reconciliation statement is a form that helps individuals, companies, firms to compare their own bank records with the bank's record.

The importance of bank reconciliation statement are-

• Error and omissions correction- Any transaction omitted or wrong figure are used while recording are easy to determine amd act accordingly.
• Precisely records transaction- even the small amount of interest earned is recorded so that exat values can be recorded in financial statements.

1. B-

Journal entries

1. C- Cost of goods sold and gross margin Calculation-