Neco 2022 Financial Accounting Question 7

A manufacturing firm maintains a cash book and receives a bank statement for the month of March. The following information is available: - Cash book balance at 31 March (debit side): ₦ 185,400 - Bank statement balance at 31 March (credit side): ₦ 210,750 - Cheques issued but not yet presented to the bank: ₦ 32,600 and ₦ 14,800 - Deposit made on 30 March but not reflected in the bank statement: ₦ 27,500 - Bank service charge shown in the statement: ₦ 1,250 (not recorded in cash book) - Interest earned on the bank balance: ₦ 2,800 (not recorded in cash book) - A cheque received from a customer was entered in the cash book as ₦ 9,500 but the actual amount was ₦ 9,050. - An error of omission: a cash receipt of ₦ 5,400 was omitted from the cash book. Using the above data, answer the following: a) Prepare a Bank Reconciliation Statement for the firm as at 31 March, showing all adjustments and the reconciled balance. b) After making the necessary adjustments, state the corrected cash book balance. c) Explain two reasons why a bank reconciliation should be performed regularly by a business.