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• # 114110
• Sat 12 Nov 2016 09:25 AM

Hi All, I really need some desperate help please.... and i come to you guys as you're much more helpful than my tutor!

I'm going to do paper BA4 tomorrow - i've done 2 mock papers, and have give through all the incorrect answers thati've got and correct them. However, there is one question on Bank Reconciliation that i just don't understand how to get the answer?!?!?

The question goes as follows:

After working through a bank statement, ticking off like items & updating the cash book - which now has a credit balance of £315, the following are outstanding:

Unpresented cheques - £950

Receipts not cleared - £373

What will be the balance on the statement?

I know that the correct answer is 262 BUT what i'm failing to understand is the principle behind it - from my understanding, you subtracted unpresented cheques, and added on outstanding lodgements (receipts)?!?!?

It seems in this instance, you have to add back the unpresented cheque and subtract the lodgement:

Balance   (315)

Receipts  - 373

              = (688)

Cheques  +950

               = 262

If somebody could spare the time to help me out here, i would be more grateful than you'd ever know!

Thank you so much!

Emma x

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• # 114111
• Sat 12 Nov 2016 10:06 AM

Hi Emma

It helps to work through it step by step.

You have a cash book value of (315) that includes the cheques and payments that are not yet shown in the bank statement.

If you have a receipt that the bank does not, You need to subtract that from your balance to match the bank. (315) - 373 = (688)

If you have a payment that the bank does not you need to add that to the bank balance (688) + 950 = 262

It may be that your tutor/course has described it from the other side.  i.e starting with the bank to match the cashbook.

In which case you would have

Statement balance + outstanding receipts - unpresented cheques = cashbook balance

Hope that helps

Ian

• Ian

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• # 114112
• Sat 12 Nov 2016 03:52 PM

Hi Emma

I too struggle with these type of questions.  I have no problems reconciling accounts but when I have to answer questions in exams or mocks I too get very confused.  It is often the way the question is worded and the actual terminology used that is confusing.  I would be interested to hear what others say about how to go about this in exam mode.  All I can offer is to say, go over your course material again and again and substitute the words from the questions into your course work and see if that helps.  What I have done in the past also, is to use You Tube.  There are loads of short videos on there for accounting processes.  Not all of them that clear true, but if you keep digging you may find one that suddenly switches on the light bulb.

Good luck with the exam. 

Regards

Sue

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• # 114113
• Sat 12 Nov 2016 07:31 PM

Ian J said:

“

Hi Emma

It helps to work through it step by step.

You have a cash book value of (315) that includes the cheques and payments that are not yet shown in the bank statement.

If you have a receipt that the bank does not, You need to subtract that from your balance to match the bank. (315) - 373 = (688)

If you have a payment that the bank does not you need to add that to the bank balance (688) + 950 = 262

 

It may be that your tutor/course has described it from the other side.  i.e starting with the bank to match the cashbook.

In which case you would have

Statement balance + outstanding receipts - unpresented cheques = cashbook balance

 

Hope that helps

 

Ian

Edited at 12 Nov 2016 10:09 AM GMT”

Hi Ian, thank you so much!

So just to check that i've got this right - if you're reconciling from the other way, i.e. from the cashbook to the statament it would be as follows:

Cashbook balance - o/standing receipts + unpresented cheques = statement balance

Have i got that right?!?!

Thanks in advance!

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