Introduction

 

 

 

This assessment covers:

LO3 Perform bank reconciliations to ensure company and bank records are correct

LO4 Reconcile control accounts and shift recorded transactions from the suspense accounts to the right accounts

 

Scenario 1

 

 

 

 

You are an employee of King Kong & Co. and the following information have been given to you.

 

  1. The cash book (bank columns) of King King & Co. for December 2016
2016 Dr £ 2016 Cr £
6-Dec P.Pan              230 1-Dec Balance b/d           1,900
20-Dec C.Hook              265 10-Dec J.Lamb              304
31-Dec W.Britten              325 19-Dec P.Wilson              261
31-Dec Balance c/d           1,682 29-Dec K.Coull                 37
          2,502           2,502

 

b)      Bank Statement for the month of Dec 2016
Dr.     £ Cr.      £ Balance  £
1-Dec Balance                            1,900 O/D
6-Dec Cheque            230                            1,670 O/D
13-Dec J.Lamb              304                            1,974 O/D
20-Dec Cheque C.Hook            265                            1,709 O/D
22-Dec P.Wilson              261                            1,970 O/D
29-Dec NSF* C.Hook              265                            2,235 O/D
30-Dec Tox: standing order                 94                            2,329 O/D
31-Dec F.Ray: trader’s credit            102                            2,227 O/D
31-Dec Bank charges                 72                            2,299 O/D
* NSF= No Sufficient Fund

 

Required

 

 

 

 

Task 1:

(Task 1 meets learning P5 Apply the bank reconciliation process to prepare a number of bank reconciliations.)

 

  1. You are to write cash book up to date taking into account all the necessary items in scenario 1.
  2. Draw up a bank reconciliation statement as on 31 December 2016. Clearly identifying the treatment of cheque not lodged at bank, unpresented cheques and NSF cheque.

 

Evidence format:  T-Accounts for cash book and Statement format for bank reconciliation.

Scenario 2

 

 

 

The following details were given to you.  You are to prepare relevant control accounts.

 

£
Sales Ledger balances at 1 July 2016 – Debit           20,040
Sales Ledger balances at 1 July 2016 – Credit                   56
Purchases Ledger balances at 1 July 2016 – Debit                   12
Purchases Ledger balances at 1 July 2016 – Debit           14,860
 

Activities during the half-year to 31 December 2016:

Payments to trde accounts payable           93,685
Cheques from credit customers         119,930
Purchases on credit           95,580
Sales on credit         124,600
Bad Debts written off                 204
Discounts allowed             3,480
Discounts received             2,850
Returns inwards             1,063
Returns outwards                 240
 

Sales Ledger credit balances at 31 December 2016

 

37

Sales Ledger debit balances at 31 December 2016           19,006
Purchases Ledger debit balances at 31 December 2016                   26
Purchases Ledger credit balances at 31 December 2016           13,241
During the half-year, debit blances in the sales ledger, amounting to £438, were transferred to the purchases ledger.

 

Required

 

 

 

 

(Task 2 below meets learning P6 Explain the process taken to reconcile control accounts and clear

suspense accounts using given account examples.)

 

Task 2    a. Prepare the sales control account and the purchases ledger control account for the half-year to 31 December 2016.

  1. Prepare a suspense ledger account. On your investigation £500 difference was related to sales that had been recorded but no corresponding entry was made in the cash book.
  2. Explain what are the benefits of control accounts and what purpose the reconciliation of the accounts serve?

 

Evidence format: Prepare T-accounts for both control accounts and suspense account and paragraphs.

 

 

 

 

Marking Scheme
Outcome Evidence for

The Criteria

Feedback Assessor’s

Decision & Page No.

 

 

 

 

 

 

 

 

 

 

 

 

LO3 Perform bank reconciliations to ensure company and bank records are correct

 

 

 

 

 

 

 

 

 

 

P5 Apply the bank reconciliation process to prepare a number of bank reconciliations.
 

 

M3 Apply the reconciliation process demonstrating the use of deposit in transit, outstanding checks and Not Sufficient Funds (NSF) check.

 

 

D3 Prepare accurate bank reconciliations that apply appropriate tools and techniques to check general accounts and balance sheets.

 

 

 

Outcomes Evidence for

The Criteria

Feedback Assessor’s

Decision & Page No.

LO4 Reconcile control accounts and shift recorded

Transactions from the suspense accounts to the right accounts

P6 Explain the process taken to reconcile control

accounts and clear suspense accounts using given account examples.

M4 Demonstrate understanding of the different types of accounts and how and why they are reconciled.
D4 Produce accurate

accounts that have been reconciled applying the appropriate methods.

 

 

 

 

Sources of Information

Guidance on Harvard APA referencing system,(http://referencing.port.ac.uk/apa/)

Dyson R J – Accounting for Non-Accounting Students (Financial Times/Prentice Hall, 2010)

Frank Wood & Alan Sangster- Business Accounting 1 (10th or 13th edition)

www.aat.co.uk– The Association of AccountingTechnicians

www.frc.org.uk – The Financial Reporting Council

www.ft.com – The Financial Times

 

Report Format

 

 

  • Use a standard business report
  • Word process the report using Microsoft Word.
  • Use 12 point Arial or Times New Roman script with 5 spacing.
  • Use the APA referencing system.
  • Complete the title page and sign the statement of authenticity.
  • Submit a TurnItIn report with your assignment.

 

Bank Reconciliation and Control Account