Calculate the correct balance of the Bank Account in the General Ledger on 31 July 2016. State if this balance is favourable or unfavourable. Provisional Bank balance = R16 785 Cheque No. 186 Interest income Bank charges Correction Cheque No. 374 Theft of cash Outstanding deposits Correct Bank balance Favourable/Unfavourable:

NSC Accounting Bank reconciliation: Calculate the correct balance of

Calculate the correct balance of the Bank Account in the General Ledger on 31 July 2016 - NSC Accounting - Question 1 - 2017 - Paper 1

Question 1

Calculate the correct balance of the Bank Account in the General Ledger on 31 July 2016. State if this balance is favourable or unfavourable. Provisional Bank balan... show full transcript

Worked Solution & Example Answer:Calculate the correct balance of the Bank Account in the General Ledger on 31 July 2016 - NSC Accounting - Question 1 - 2017 - Paper 1

Step 1

Calculate the correct balance of the Bank Account in the General Ledger on 31 July 2016.

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Answer

To calculate the correct balance, we start with the provisional bank balance of R16 785.

Add Cheque No. 186: R450
Add Interest income: R285
Subtract Bank charges: R950
Subtract Correction Cheque No. 374: R3,600
Subtract Theft of cash: R37,800
Add Outstanding deposits: R27,180

The calculation thus becomes:

$ext{Correct Bank balance} = R16,785 + R450 + R285 - R950 - R3,600 - R37,800 + R27,180$

This totals to:

$R16,785 + R450 + R285 - R950 - R3,600 - R37,800 + R27,180 = R24,830$

Therefore, the correct bank balance is R24,830.

Step 2

State if this balance is favourable or unfavourable.

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Answer

This balance is deemed unfavourable as the bank account shows a negative or unattractive balance, indicating potential financial instability.

Step 3

Explain ONE internal control measure that the business should implement to ensure that this does not happen in the future.

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Answer

One internal control measure the business could implement is the use of two or zero marks for checks. This method involves issuing two signatures for all cheques above a certain limit or ensuring dual approval for significant transactions, reducing the risk of unauthorized access and potential cash theft.

Calculate the correct balance of the Bank Account in the General Ledger on 31 July 2016 - NSC Accounting - Question 1 - 2017 - Paper 1

Worked Solution & Example Answer:Calculate the correct balance of the Bank Account in the General Ledger on 31 July 2016 - NSC Accounting - Question 1 - 2017 - Paper 1

Calculate the correct balance of the Bank Account in the General Ledger on 31 July 2016.

State if this balance is favourable or unfavourable.

Explain ONE internal control measure that the business should implement to ensure that this does not happen in the future.

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