Acct4123 Advanced Management Accounting : Assessment Answers
b) Identify five (5) possible causes the bank statement balance does not agree with cash book balance.
Answer:
Solution a
The new balance as in the end of march 2014 is
Cash – 5231
Bank- 8230
The calculation are present in the excel sheet.
Solution b
Five possible causes that the bank statement balance does not agree with cash book are:
1.The cash book balance and bank book balance does not match due to the bank charges because such charges are recorded in the cash book after receiving the periodical bank statement.
2.Cheque deposited by company but the same is not reflected in the bank account immediately.
3.Another reason for not matching the cash book balance and bank book balance is that bank deducts a lot of charges like- cheque printing charges, bank service charge and SMS alert charges etc. These charges are not recorded in the cash book at the time of deduction. Hence the cash balance is more than the bank balance.(Foundation 2017)
4.Interest income is another reason for not matching of the cash book and bank book balance.The interest income that the company earns is credited to the bank account. It is entered in the cash book only after the issuance of bank statement.
- Cheque drawn by company but bank is unable to make payment on that cheque due to insufficient fund. Thus that causes a difference between the cash book and the bank book.(Ahmed 2016)
Refrences
Ahmed, R 2016, Bank Reconciliation Report.Cloud Computing Using Oracle Application Express, Apress Publications, Berkeley, CA.
Foundation, BG 2017, Introduction to Bookkeeping: A Flexible Learning Course, Commonwealth Of Learning.
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