XYZ Co uses a computer package to maintain its accounting records. A printout of its cash book for the month of May 20X5 was extracted on 31 May and is summarised below.
| $ | $ | ||
| Balance b/d | 137 | Payments | 1,492 |
| Receipts | 1,573 | Balance c/d | 218 |
| 1,710 | 1,710 |
The company’s chief accountant provides you with the following information.
a)Bank charges of $315 shown on the bank statement have not been entered in the company’s cash book.
b)Three standing orders entered on the bank statement have not been recorded in the company’s cash book: a subscription for trade journals of $26, an insurance premium of $180 and a business rates payment of $1,086.
c)A cheque drawn by XYZ Co for $347 and presented to the bank on 26 May has been incorrectly entered in the cash book as $468.
After correcting the errors above, what is the revised balance on the cash book?
Answer
| CASH BOOK | |||||
| $ | $ | ||||
| 20X5 | 20X5 | ||||
| 31-May | Balance b/d | 218 | 31-May | Bank charges | 315 |
| Error $(468 – 347) | 121 | Trade journals | 26 | ||
| Balance c/d | 1,268 | Insurance | 180 | ||
| – | Business rates | 1,086 | |||
| 1,607 | 1,607 | ||||
| Credit Balance | 1,268 | ||||