1
The following is a summary of a cash book as presented by George Ltd for the month of
October:
£ £
Receipts 1,469 Balance b/d 761
Balance c/d 554 Payments 1,262
2,023 2,023
All receipts are banked and all payments are made by cheque.
On investigation you discover:
(1) Bank charges of £136 entered on the bank statement have not been entered in the cash book.
(2) Cheques drawn amounting to £267 had not been presented to the bank for payment.
(3) Cheques received totalling £762 had been entered in the cash book and paid into the bank,
but had not been credited by the bank until 3 November.
(4) A cheque for £22 for sundries had been entered in the cash book as a receipt instead of as a
payment.
(5) A cheque received from K Jones for £80 had been returned by the bank and marked ‘No funds
available’. No adjustment has been made in the cash book.
(6) A standing order for a business rates instalment of £150 on 30 October had not been entered
in the cash book.
(7) All dividends received are credited directly to the bank account. During October amounts
totalling £62 were credited by the bank but no entries were made in the cash book.
(8) A cheque drawn for £66 for stationery had been incorrectly entered in the cash book as £60.
(9) The balance brought forward in the cash book should have been £711, not £761.
Required:
(a) Show the adjustments required in the cash book.
(b) Prepare a bank reconciliation statement as at 31 October.