Bece Model Questions Vol1 2021 Business Studies Question 5

Practice practical question 5 from the 2021 Bece Model Questions Vol1 Business Studies examination. This question covers Banking, Cash book, Bank reconciliation, Interest calculation, Short‑term financing .

Bece Model Questions Vol1 2021 Business Studies Practical
Topics: Banking Cash book Bank reconciliation Interest calculation Short‑term financing
Question 5 BECE_MODEL_QUESTIONS_VOL1 • 2021 • BUSINESS_STUDIES • practical

A small trading business keeps a cash book and also receives a monthly bank statement. The following information relates to the period ended 30 June 2024: - Cash book balance (debit) on 30 June 2024: ₦250,000 - Bank statement balance (debit) on 30 June 2024: ₦210,000 - Cheques issued but not yet presented (as per cash book): * Cheque No. 101 for ₦30,000 dated 28 June * Cheque No. 102 for ₦15,000 dated 30 June - Deposits recorded in the cash book but not yet reflected in the bank statement: a cash deposit of ₦20,000 received on 30 June. - Bank charges shown on the statement (not recorded in the cash book): ₦2,500. - Interest earned shown on the statement (not recorded in the cash book): ₦1,200. - Bank error: the bank mistakenly credited ₦5,000 to another customer's account; the amount should be deducted from the business's balance. - Cash receipt of ₦8,700 recorded by the bank but not yet entered in the cash book. Based on the above information answer the following questions:

Question Parts

( a )
Prepare a bank reconciliation statement showing the adjusted cash book balance.
( b )
Identify any two possible reasons, other than those already given, for a difference between the cash book balance and the bank statement balance, and suggest how each should be corrected in the records.
( c )
The bank pays interest at 4% per annum simple interest, credited quarterly. Calculate the effective annual interest rate earned on the adjusted cash book balance and show the calculation.
( d )
The business aims to keep a minimum cash book balance of ₦50,000. Based on your reconciliation, advise whether this requirement is met and, if it were not, recommend one short‑term financing option, stating its key features.

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About This Question

This is Bece Model Questions Vol1 2021 Business Studies Question 5. It is one of the practical questions from the 2021 Bece Model Questions Vol1 Business Studies examination.

The question covers Banking, Cash book, Bank reconciliation, Interest calculation, Short‑term financing .

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