Higher Nationals

Assignment Brief – BTEC (RQF)

Higher National Diploma in Business (Business Management)

Student Name /ID Number Doan Thi Ngoc Nga (Annie) / KJ50500

Unit Number and Title Unit 10: Financial Accounting

Academic Year 2018 - 2019

Unit Assessor Ms. Kha Pham

Assignment Number and Title FA2: Reconciliations in Accounting (2 of 2)

Issue Date 07 December 2018

Submission Date 07 January 2019

IV Name

Date

Submission Format:

The submission is in the form of an individual written report. This should be written in a concise, formal
business style using single spacing and font size 12. You are required to make use of headings,
paragraphs and subsections as appropriate, and all work must be supported with research and
referenced using the Harvard referencing system. Please also provide a bibliography using the Harvard
referencing system. The recommended word limit is 1,000–1,500 words, although you will not be
penalised for exceeding the total word limit.
Unit Learning Outcomes:

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.

Assignment Brief and Guidance:

You work for a small accountancy firm that provides accounting, taxation and auditing services. As a
Junior Accountant, you have been asked by regular clients to perform bank reconciliations to ensure
company and bank records are correct; and reconcile control accounts and shift recorded transactions
from the suspense accounts to the right accounts. This assignment has three parts:

Part A: From the information of bank transactions given below you are required to prepare bank
reconciliation statement for Jamie’s business at 31 May 2018.

At the end of each month, Jamie is responsible for preparing bank reconciliation statements for her
business bank account. At 31 May 2018, the cash ledger balance was £2,759 (credit) and her bank
statement showed that she had funds of £131 at the bank. The following information is presented:
(i) The bank debited Jamie’s account with charges of £129 during May. Jamie has not recorded
these charges.
(ii) Jamie arranged for £2,500 to be transferred from her personal bank account into the business
bank account. The bank made the transfer on 30 May, but Jamie has not made any entry for it in
her records.
(iii) On 22 May, Jamie withdrew £100 cash, which she did not record.
(iv) Cheque number 543987, which Jamie issued to a supplier, appears on the bank statement as
£650. Jamie incorrectly recorded the cheque as £560.
(v) On 31 May, Jamie lodged £457. On the bank statement, this amount is dated 3 June.
(vi) Jamie was advised by the bank that she earned £52 interest for the period in May that her
account was in credit. Jamie recorded this in May, but the bank did not credit her account until
June.
(vii) Three of the cheques issued in May, with a total value of £942, were not debited on the bank
statement until after 31 May.
(viii) A cheque for £276, issued to a supplier, was cancelled but Jamie has not recorded the
cancellation of the cheque.
Required:
1. Prepare the Adjusted Cash at Bank ledger account
2. Prepare bank reconciliation statement for Jamie’s business as at 31 May 2018.
Part B:
Katrina maintains a debtors control account in her business. At 31 December 2018, the total of
individual balances extracted from the ledgers was £128,086, while the balance on the control account
was calculated as being £128,710. An examination of the books and records revealed the following:
(i) Instead of £29,450, the total input in sales daybook had been recorded as £29,540.
(ii) The credit balance of £118 on a receivable account had been listed as a debit balance.
(iii) A bad debt of £500 had been correctly written off in the receivable account, but no entry had
been made in the control account.
(iv) Discounts allowed totalling £185 had been entered on the wrong side of the control account.
(v) The total on the debit side of a receivable account had been overcast by £100.

Required:
1. Explain the importance of using control accounts
2. Write up the debtors control account
3. Prepare a reconciliation of individual balances with the control account balance

Part C:
The trial balance of Shuswap Ltd. was extracted as at 31 December 2018 failed to agree. The credits
exceeded the debits by £3,740.
A detailed examination of the books was undertaken and the following matters were uncovered:
1. No entry had been made for expenses paid in cash, the expenses were as follows:
Electricity £55
Water £22
Carriage £41
2. Discounts received of £110 were debited to discounts allowed. The entry in the payable’s
personal account was correct.
3. Sales returns of £980 was treated correctly in the customer’s account and credited to the sales
returns account as £890.
4. The total in the purchases day book of £17,150 was debited to the purchases returns
5. The bookkeeper forgot to post the wages and salaries journal of £10,150 for December 2012.
6. A sales invoice of £1,050 was entered as £950.
7. A payment for building repairs of £1,045 was credited to the Buildings at Cost ledger account
and credited to the cash account.

Required:
1. List and explain, with examples, different types of errors in journal recording and indicate
which errors will require suspense account corrections.
2. Prepare journal entries to correct the error in Shuswap Ltd and eliminate the balance on the
suspense account. Indicate what type of error was made for each journal entry.

Pearson Education 2018

Higher Education Qualifications
Assignment Brief
Learning Outcomes and Assessment Criteria

Learning Outcome Pass Merit Distinction

LO3 Perform bank P5 Apply the bank M3 Apply the D3 Prepare accurate
reconciliations to reconciliation process reconciliation process bank reconciliations
ensure company to prepare a number of demonstrating the use that apply appropriate
and bank records are bank reconciliations. of deposit in transit, tools and techniques to
correct outstanding checks and check general accounts
Not Sufficient Funds and balance sheets.
(NSF) check.

LO4 Reconcile control P6 Explain the process M4 Demonstrate D4 Produce accurate

accounts and shift taken to reconcile understanding of the accounts that have
recorded control accounts and different types of been reconciled
transactions from the clear suspense accounts and how and applying the
suspense accounts to accounts using given why they are appropriate methods.
the right account examples. reconciled.
accounts

Pearson Education 2018

Higher Education Qualifications
Assignment Brief