Neco 2020 Financial Accounting Question 7

Alpha Traders Ltd. maintains a cash book for its bank transactions. The following information is available for the month ended 31 March 2024: - Cash book (bank) balance on 31 March: ₦1,250,000 (debit). - Bank statement balance on 31 March: ₦1,180,000 (credit). - Outstanding cheques at 31 March: ₦45,000 (cheques dated 30 March not yet presented). - Deposits in transit at 31 March: ₦30,000 (cash received on 31 March but not reflected on the statement). - Bank charged ₦12,000 for a service fee which was not recorded in the cash book. - A customer’s cheque of ₦20,000 was dishonoured on 2 April; the bank deducted the amount from the statement balance. - The bank statement shows a credit of ₦5,000 for interest earned which was not recorded in the cash book. - An error on the bank side: a cheque of ₦8,000 paid to a supplier was recorded as ₦80,000 on the statement. Using the above information, answer the following: a) Prepare a Bank Reconciliation Statement for Alpha Traders Ltd. showing the adjusted cash book balance as at 31 March 2024. b) Identify two possible reasons (other than the items listed above) that could cause a difference between the cash book balance and the bank statement balance. c) Explain how unpresented cheques affect the cash flow statement of a company.