FAC1502
Financial Accounting Concepts, Principles and
Procedures
Assignment 02 for Semester 02 (compulsory)
MARKS COUNT 50% TOWARDS YOUR YEAR MARK.
Unique Number 794842
Use the following information to answer questions 1 to 7:
BAIGE SERVICES
The following information pertains to Baige Services:
An inexperienced bookkeeper prepared the following bank reconciliation statement:
On 1 October 20.7, the bank account of Baige services has a favourable balance of R3 370.
Additional information
(a) Provisional totals at 31 October 20.7
R
Cash receipts journal………………...……………………………………………..……35 350
Cash payments journal………………………………..…………………………………32 230
Bank statement……………………………………………………………………………32 402
(b) A deposit of R1 590 made on 31 October 20.7 is not shown on the bank statement.
(ii) The bank has erroneously debited a stop order for R100 against the bank account of
Baige Services.
(iii) The following cheques issued by the entity have not yet been presented for
payment:
Cheque no 637 (15 October 2017) R286
Cheque no 640 (20 October 2017) R319
Cheque no 641 (25 October 2017) R 83
(c) The deposit of R22 000 dated 28 October 20.7 had not been deposited into the bank
account and Sheila Shyster, the bookkeeper of Baige Services, cannot account for the
whereabouts of the cash. An insurance claim was submitted to Big Insurers. No entries
were made in the books of Baige Services regarding the loss of money.
, (d) B Brooks, a debtor, paid an amount of R2 110 directly into Baige Services’s bank
account. The transaction has not yet been recorded in the entity’s books.
(e) The bank credited R30 interest to the entity’s account.
(f) Cheque no 633 for 150, issued to Josmas Limited, was entered as R510 in the cash
payments journal.
(g) Bank charges for October 20.7 amount to R140.
(h) A cheque for R250 received from A Wilson was unpaid and is shown as such on the bank
statement.
(i) As internal auditor you notice that cheque no 975 for R18 000 appeared on the bank
statement, but not in the cash payments journal. On investigation you find that the
cheque (signed by S Shyster) had been cashed. It was found that the cheque was stolen
and the bookkeeper S Shyster, had signed all the cheques in the cheque book in
advance. The amount must be written off because the insurance company refuse to pay
out, due to negligence. No entries were made regarding the loss.
1. The total amount in the cash receipts journal on 31 October 20.7 will be:
(1) R35 350
(2) R37 460
(3) R37 490
(4) R37 850
(5) R38 100
Answer:
5.5 Cash journals
5.5.1 Cash receipts journal
All moneys received which is deposited in the entity’s bank account is recorded in the cash
receipts journal. At the end of the month only one amount, which represents the entire
month’s cash receipts, is debited to the bank account. The other column totals represent
the contra accounts and are credited to such accounts. The amounts in the sundry accounts
column are credited individually to the relevant accounts.
Financial Accounting Concepts, Principles and
Procedures
Assignment 02 for Semester 02 (compulsory)
MARKS COUNT 50% TOWARDS YOUR YEAR MARK.
Unique Number 794842
Use the following information to answer questions 1 to 7:
BAIGE SERVICES
The following information pertains to Baige Services:
An inexperienced bookkeeper prepared the following bank reconciliation statement:
On 1 October 20.7, the bank account of Baige services has a favourable balance of R3 370.
Additional information
(a) Provisional totals at 31 October 20.7
R
Cash receipts journal………………...……………………………………………..……35 350
Cash payments journal………………………………..…………………………………32 230
Bank statement……………………………………………………………………………32 402
(b) A deposit of R1 590 made on 31 October 20.7 is not shown on the bank statement.
(ii) The bank has erroneously debited a stop order for R100 against the bank account of
Baige Services.
(iii) The following cheques issued by the entity have not yet been presented for
payment:
Cheque no 637 (15 October 2017) R286
Cheque no 640 (20 October 2017) R319
Cheque no 641 (25 October 2017) R 83
(c) The deposit of R22 000 dated 28 October 20.7 had not been deposited into the bank
account and Sheila Shyster, the bookkeeper of Baige Services, cannot account for the
whereabouts of the cash. An insurance claim was submitted to Big Insurers. No entries
were made in the books of Baige Services regarding the loss of money.
, (d) B Brooks, a debtor, paid an amount of R2 110 directly into Baige Services’s bank
account. The transaction has not yet been recorded in the entity’s books.
(e) The bank credited R30 interest to the entity’s account.
(f) Cheque no 633 for 150, issued to Josmas Limited, was entered as R510 in the cash
payments journal.
(g) Bank charges for October 20.7 amount to R140.
(h) A cheque for R250 received from A Wilson was unpaid and is shown as such on the bank
statement.
(i) As internal auditor you notice that cheque no 975 for R18 000 appeared on the bank
statement, but not in the cash payments journal. On investigation you find that the
cheque (signed by S Shyster) had been cashed. It was found that the cheque was stolen
and the bookkeeper S Shyster, had signed all the cheques in the cheque book in
advance. The amount must be written off because the insurance company refuse to pay
out, due to negligence. No entries were made regarding the loss.
1. The total amount in the cash receipts journal on 31 October 20.7 will be:
(1) R35 350
(2) R37 460
(3) R37 490
(4) R37 850
(5) R38 100
Answer:
5.5 Cash journals
5.5.1 Cash receipts journal
All moneys received which is deposited in the entity’s bank account is recorded in the cash
receipts journal. At the end of the month only one amount, which represents the entire
month’s cash receipts, is debited to the bank account. The other column totals represent
the contra accounts and are credited to such accounts. The amounts in the sundry accounts
column are credited individually to the relevant accounts.
