The business keeps a two‑column cash book (cash and bank). The following transactions occurred in the month:

1. Opening cash balance: Debit ₦15,000; opening bank balance: Debit ₦25,000.
2. Cash sales of ₦12,000 (cash side debit, sales credit).
3. Cash purchases of ₦5,000 (cash side credit, purchases debit).
4. A bank receipt of ₦8,000 from a customer was mistakenly entered on the cash side.
5. A bank payment of ₦3,000 for rent was correctly posted on the bank side.
6. A cheque received for ₦4,000 was initially entered as a bank receipt but later reversed when it was dishonoured.

At month‑end the cash book shows a cash balance of ₦30,000 and a bank balance of ₦22,000. Compute the correct cash and bank balances after adjusting for the mis‑posted receipt and the dishonoured cheque.

Question

The business keeps a two‑column cash book (cash and bank). The following transactions occurred in the month:

1. Opening cash balance: Debit ₦15,000; opening bank balance: Debit ₦25,000.
2. Cash sales of ₦12,000 (cash side debit, sales credit).
3. Cash purchases of ₦5,000 (cash side credit, purchases debit).
4. A bank receipt of ₦8,000 from a customer was mistakenly entered on the cash side.
5. A bank payment of ₦3,000 for rent was correctly posted on the bank side.
6. A cheque received for ₦4,000 was initially entered as a bank receipt but later reversed when it was dishonoured.

At month‑end the cash book shows a cash balance of ₦30,000 and a bank balance of ₦22,000. Compute the correct cash and bank balances after adjusting for the mis‑posted receipt and the dishonoured cheque.

Accepted Answer

Cash balance ₦22,000; Bank balance ₦30,000

Gce Model Questions Vol1 2017 Financial Accounting Question 38

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