IGCSE Accounting Paper-1: Specimen Questions with Answers 264 - 265 of 338
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Passage
The bank column of Abhay Nigam՚s cash book had a credit balance brought down of $ 1450 on 1 April 2019. The bank statement on the same date showed a debit balance of $ 230.
Following things were discovered by Abhay when he compared his cash book with the bank statement-
Items on the Bank Statement but Not in the Cash Book
Bank charges of $ 100
Dividend received $ 500
Insurance premium paid by bank $ 200
Direct deposit of $ 1000 by Robert, a customer
Items in the Cash Book but Not in the Bank Statement
Cheque received from Kundan of $ 250 was recorded twice in the cash book.
Cheque issued to Namrata $ 850, a credit supplier
Cash deposited $ 120
Question 264 (1 of 6 Based on Passage)
Write in Short
Short Answer▾Update the bank column of Abhay՚s cash book on 1 April 2019 and bring down the bank balance. (Marks 7)
Abhay
Cash Book (Bank Columns Only)
| Date | Details | $ | Date | Details | $ |
Explanation
Abhay
Cash Book (Bank Columns Only)
| Date | Details | $ | Date | Details | $ |
| 2019 April 1 | Dividend | 500 | 2019 April 1 | Balance b/d | 1450 |
| Robert | 1000 | Bank Charges | 100 | ||
| Balance c/d | 500 | Insurance Premium | 200 | ||
| Kundan (Error) | 250 | ||||
| 2000 | 2000 | ||||
| April 1 | Balance b/d | 500 |
Question 265 (2 of 6 Based on Passage)
Question
True-False▾Statements
Pay in Slip is used to withdraw cash from bank. (Marks 4)
Debit side of cash book represents payments and credit side represents receipts of cash transactions.
Cash withdrawn from bank for personal use is not a contra entry.
Bank Reconciliation is a part of double entry system.
Choices
| Choice (4) | |
|---|---|
a. | Both statement Ⅱ & statement Ⅳ are true. |
b. | Only statement Ⅱ is true. |
c. | Both statement Ⅲ & statement Ⅳ are true. |
d. | Only statement Ⅲ is true. |
Answer
d.Explanation
| True/False | |
| (I) Pay in Slip is used to withdraw cash from bank. | False |
| (II) Debit side of cash book represents payments and credit side represents receipts of cash transactions. | False |
| (III) Cash withdrawn from bank for personal use is not a contra entry. | True |
| (IV) Bank Reconciliation is a part of double entry system. | False |
- Pay in Slip is used to deposit either cash or cheque of customers for collection of payments in the bank account.
- Debit side of cash book represents receipts and credit side represents payments of cash transactions.
- Cash withdrawn from bank for personal use is debited to Drawings A/c and not cash A/c. So, it will be a contra entry because both Cash A/c and Bank A/c are not involved.
- Bank Reconciliation Statement is not a part of double entry system. It is mere a statement prepared to reconcile the bank balances shown by the cash book and that by the bank statement.