Question

The following information is provided regarding Busy Business:

Bank Statement - Issued: 31/05/20
	Bank Statement 55 Page 1
Date	Transaction	Withdrawal	Deposit	Balance
1-May	Balance			$ 5,455.00	CR
3-May	Deposit		560.00	$ 6,015.00	CR
6-May	1133	1,200.00		$ 4,815.00	CR
8-May	Dividend Telstra		160.00	$ 4,975.00
12-May	Deposit		4,000.00	$ 8,975.00	CR
14-May	Deposit		1,444.00	$ 10,419.00	CR
18-May	Deposit		1,672.00	$ 12,091.00	CR
19-May	1132	3,600.00		$ 8,491.00	CR
21-May	Deposit		650.00	$ 9,141.00	CR
25-May	EFT Deposit		300.00	$ 9,441.00	CR
27-May	1135	960.00		$ 8,481.00	CR
28-May	DD- City Rentals	880.00		$ 7,601.00	CR
29-May	Returned cheque	120.00		$ 7,481.00	CR
30-May	Bank Fees	45.00		$ 7,436.00	CR
31-May	1136	5,000.00		$ 2,436.00	CR
Notes:
- Deposit on 8th May was a direct deposit from Telstra as a dividend on shares held
- EFT Deposit on 25th was payment by debtor/accounts receivable
- 28th May DD- City Rentals is monthly payment for rent
- 29th May returned cheque is a cheque returned 'not sufficient funds (NSF)' from an accounts receivable/debtor

  

Cash at Bank
Date	Item	Ref	Debit	Credit	Balance
1/05/2020	Balance bd				$ 5,455.00	DR
31/05/2020		Cash Rec 5	8,826.00		$ 14,281.00	DR
31/05/2020		Cash Pay 5		11,770.00	$ 2,511.00	DR

Required:

Using the templates provided below
(a) prepare a bank reconciliation statement

(b) post the necessary adjustments to Cash at Bank in the General Ledger at 31st May 2020 .

(c) A bank reconciliation statement is an example of an internal control. Provide 2 further examples of internal controls that a business might have to safeguard its assets.

Answer 1

1	Busy Business
	Bank reconciliation
	May 31, 2020
	Balance per bank statement, May 31, 2020		2,436
	Add: Deposit in transit		500
			2,936
	Less: Outstanding cheques		1,010
	Adjusted Bank Balance		1,926
	Balance per books, May 31, 2020		2,511
	Add: Dividend Income	160
	EFT collection	300	460
			2,971
	Less: Rent Expense	880
	NSF cheque	120
	Bank Fees	45	1,045
	Adjusted Book Balance		1,926
2
Date	Accounts	Debit	Credit
May 31	Cash	4,000
	Dividend revenue		4,000
May 31	Cash	300
	Accounts Receivable		300
May 31	Rent Expense	880
	Cash		880
May 31	Accounts Receivable	120
	Cash		120
May 31	Miscellaneous Expense	45
	Cash		45
3	Physical Audits of Assets
	Daily or Weekly Trial Balances