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

Start with the provisional bank balance:

Provisional Bank balance = R16 785

Adjust for Cheque No. 186:

Cheque No. 186 = + R450

Add interest income:

Interest income = + R285

Subtract bank charges:

Bank charges = - R950

Subtract the correction for Cheque No. 374:

Correction Cheque No. 374 = - R3 600

Subtract theft of cash:

Theft of cash = - R37 800

Now, calculate the correct bank balance as follows:

Correct Bank balance = R16 785 + R450 + R285 - R950 - R3 600 - R37 800

Correct Bank balance = R24 830

Determine if the balance is favourable or unfavourable:

The correct balance of R24 830 is unfavourable due to the overdraft situation.