Neco 2019 Financial Accounting Question 6

The cash book of ABC Enterprises for the month of January 2023 is partially shown below. All figures are in ₦ thousands. The opening cash balance on 1 January was ₦50,000 (debit). The bank statement for the same period shows a closing balance of ₦70,000 and notes the following items not yet recorded in the cash book: - Bank charges of ₦1,000 (deduction). - A cheque issued for ₦5,000 that has not been presented. - A cash deposit of ₦15,000 made on 30 January not reflected in the bank statement. - Interest income of ₦2,500 recorded in the cash book but not yet credited by the bank. Cash Book (excerpt): | Date | Particulars | Ref | Receipts | Payments | Balance | |------|----------------------|-----|----------|----------|---------| | 1 Jan| Opening Balance | OB | | | 50,000 | | 1 Jan| Received from Customer A | R1 | 20,000 | | | | 5 Jan| Rent Paid | P1 | | 8,000 | | |10 Jan| Loan Proceeds | R2 | 30,000 | | | |12 Jan| Salaries Paid | P2 | |15,000 | | |15 Jan| Utilities Paid | P3 | | 4,000 | | |20 Jan| Interest Income | R3 | 2,500 | | | |25 Jan| Purchase of Supplies | P4 | |12,000 | | |28 Jan| Cash Sales | R4 |25,000 | | | |31 Jan| Closing Balance | | | | | Tasks: (a) Complete the cash book to determine the closing cash balance on 31 January. (b) Prepare a bank reconciliation statement showing the adjusted cash book balance and the adjusted bank balance, and state the final reconciled balance. (c) Identify two common reasons why discrepancies may arise between the cash book and the bank statement. (d) Explain why the cash book is referred to as the "prime book of entry" in the accounting system.