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Final Exam Revision

Final Exam Revision

Date and Time December 20, 2011 9:00am

Topics Sole Proprietorships Financial Statements

Trading Profit and Loss A/c Vertical Format Balance Sheet Vertical Format

Cash books Bank Reconciliation Statements

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Format of Exam Multiple Choice Questions 15 Questions from all three topics Calculations Three questions and required to answer 2 Trading and Profit and Loss is compulsory Choose between Cash Book and bank reconciliation

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What to Study? Handout Pages 22 -26 Work sheets 5 7 Power Point Slides 7 11 Power Point Slides Question 1 & 5 Answers

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Financial Statements Accrued Expenses Added to respective Expense and recorded as a current Liability Prepaid Expenses Deducted from respective expense and recorded as a Current Assets Provision for bad debt Depreciation Recorded as an Expense and Deducted from Respective Assets at cost figure. Stock in TB is Opening Stock and Stock in Notes is Closing Stock. Everything in notes is recorded twice.

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Bank Reconciliation Reconciliation of the Cash Book bank column Balance with the Bank Statement balance There are three (3) reasons why they wouldnt agree with each other:
Items Recorded by the bank and not by the cash book Items recorded by the cash book and not by the bank Errors made by either the bank or the cash book.

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Possible Errors Understated Cheque Deducted from either balance Overstated Cheque Added to either balance Understated Deposit Added from either balance Overstated Deposit Deducted from to either balance Items not recorded by either Must know how to treat items not recorded by Cash book or bank. To do so must know how an items is treated by the other party and record the same

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Items not recorded by either Example How would this affect the bank:
Bank Charges Standing Order. Dividends received and banked Payment to creditor Item previously written off as bad debt, cheque received and banked Debtor paid direct into Rogers bank account Drawings in the form of a cheque Cheque previously banked now dishonoured.

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Cash Book Records Cash Receipts and Cash Payment. Receipt of Cash and Cheques are recorded in Receipts Side Cash Column until banked. Deposits Directly to the bank by the Customers or the Business are recorded in the Bank Receipts Side Bank Column.
Cash Payments are recorded in Payments Side Cash Column Cheque Payments are recorded in Payments Side Bank Column.

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Cash Book - Discounts Discounts Allowed are recorded on Receipts Side Discount Column. Discount Received are recorded on Payments Side Discount Column. Cash Book Balancing off Bank Column Receipts should be balanced with Bank column payments Cash Column Receipts should be balanced with cash column payments.

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Cash Book Balancing off Discount Columns and added and totals put at the bottom.