Memo for Bank Recon classwork exercises Chapter 3 Task 3.1 Task 3.11

Transcription

1 Memo for Bank Recon classwork exercises Chapter 3 Task 3.1 Task 3.11 TASK 3.1 Ashley: Revision - Case study Explain how Ashley benefits from operating a current banking account. Safety he does not have to keep large amounts of cash as the cheque account allows for daily depositing. Cheques are reasonably safe and convenient means of payment. Any other valid reason may apply Calculate Ashley s bank balance on 30 June = R Will Ashley s bank balance be the same as that of the bank statement? Explain. No. The bank has already deducted the charges from Ashley s account. Ashley s books will not have reflected the charges If not, what would the balance in the bank statement be? = R Ashley s financial records would have to be updated with the charges appearing on the bank statement. In which journal would he record this? CPJ After updating his financial records, will Ashley s bank account balance be the same as that of his account at the Bank? Explain. Yes. His bank account balance of R2 660 will decrease by R124 thus giving him a balance of R2 536.

2 TASK 3.2 BB Traders: Revision Task on cash journals CASH RECEIPTS JOURNAL OF BB TRADERS FOR JANUARY 20.5 Doc. no. D Details Fol Analysis of receipts Bank Sales Cost of sales Sundry accounts Amount Fol Details R001 1 B. Ben Capital R002 4 Alpha Insurance Association Loan: Alpha Ins. Assoc. R003 9 Namaqua Butchery Rent income R B. Ben Capital CRT 17 Sales CRT 23 Sales CRT 30 Sales EFT Sandveld Trust Interest on fixed deposit CRJ

3 CASH PAYMENTS JOURNAL OF BB TRADERS FOR JANUARY 20.5 Doc. D Details Fol Bank Stationery no. Trading stock Sundry accounts Amount Fol Details Cash Petty cash 002 Cash Cash float AK Agents Premises/Land & Buildings FFS Shopfitters Equipment ABC Wholesalers Office Suppliers Ltd Equipment/Furniture Witbank Municipality Licence Hawk Insurance Brokers Insurance Office Suppliers Ltd Equipment Hawk Insurance Brokers Insurance Afghan Stationers B. Ben/Cash Drawings Cash Petty cash 014 TJ Traders Sandveld Trust Fixed deposit: Sandveld Trust Fast Carriers Municipality/Electricity Dept Water and electricity FM Stationers B. Ben/Cash Drawings SA Transport Services Alpha Insurance Association Loan: Alpha Ins. Assoc Interest on loan NM Stationers City Treasurer Rates and taxes 024 Witbank Wholesalers Consumable stores L. Lane Salaries 026 M. Michael Salaries 027 Cash Petty cash B/S Memela Bank Bank charges CPJ

4 TASK 3.3 Baseline assessment COLUMN A COLUMN B COLUMN A COLUMN B A 13 M 3 B 11 N 22 C 9 O 4 D 10 P 6 E 14 Q 8 F 15 R 2 G 17 S 20 H 18 T 1 I 21 U 7 J 19 V 12 K 23 W 5 L 16 TASK 3.4 Joe Duffy: Bank Statement and cash journals Calculate the bank balance in the books of Joe Duffy. Indicate whether the bank balance is favourable or unfavourable. Total deposits R Total cheque payments Favourable bank balance R Calculate the bank balance as per the bank statement. Indicate whether the bank balance is favourable or unfavourable. Total deposits R Total cheque payments Favourable B/S balance R From Joe Duffy s point of view, is the bank balance an asset or a liability? Asset From the bank s point of view, is the bank balance an asset or a liability? Liability Compare the bank balances in and above. What conclusion can you draw from these? Both balances are equal all deposits appear on the bank statement and all cheques issued have been presented to the bank Refer to the payment of R1 500 in the CPJ on This amount also appears on the bank statement. What does this imply? The cheque has been presented to the bank for payment Refer to the payment of R1 500 in the CPJ on This amount appears on the bank statement on Explain the difference in the dates. Joe Duffy issued the cheque on the 06 th ; the payee presented the cheque on the 10 th. The payee can present the cheque to the bank at any time after he has received the cheque. The cheque is no longer valid after six months when the cheque becomes stale Does Joe Duffy make daily deposits? Explain. No. He makes deposits periodically. He probably wants to save on bank charges deposits attract a fee called cash deposit fees.

5 3.4.9 Joe Duffy made three cheque payments during May. For what reasons could these cheques have been issued? Give four examples. To buy stock; to pay a supplier; to purchase consumables; to pay for repairs; etc Assume that the deposit of R5 400 does not appear on the May bank statement. What would this imply? The books of Joe Duffy and the bank would not be in balance Give a possible reason for the deposit of R5 400 not appearing on the bank statement. The deposit is late the amount was deposited after the bank statement had been completed Assume that the cheque for R600 does not appear on the May bank statement. What would this imply? The books of Joe Duffy and the bank would not be in balance Give a possible reason for the cheque for R600 not appearing on the bank statement. The payee has not yet presented the cheque to the bank for payment. TASK 3.5 Bank Statement BANK STATEMENT (Extract) Details Date Debits Credits Balance Balance Deposit Cheque Deposit Deposit Cheque Cheque Deposit Cheque Deposit Deposit TASK 3.6 Case study on Internet fraud What do you understand by spyware? Explain to the person sitting next to you how you think the hackers use this spyware. Learners to discuss with their fellow pupils from their own experience. It is not so much the full understanding of how the equipment works, but the realisation that this is taking place and therefore, internet users have to be extra vigilant. Spyware is used by hackers to read the customer s data. This can take the form of reading your profile on the internet or at an ATM. By some sophisticated mechanism, they can hack into your system and read the keystrokes to obtain your PIN code, etc. In most cases, the customer has to allow them in by accepting their This article was written a few years ago. Do you think that this type of fraud has been eliminated today? Why? Discuss using examples from your own experience or from what you have read. Learners to give their own opinions. Fraud and hacking on the internet is still taking place, so therefore, the authorities have not been able to stop it completely. As soon as they stop one process, the hackers develop something else What, in your opinion, makes a person engage in fraud of any sort? Do you believe they are justified in their opinion? Learners to give their own opinions. Suggestions:

6 It is unethical and unlawful. People are often driven to this type of crime due to greed or due to their personal circumstances, e.g. hunger, etc. However, it does entail a degree of intelligence to be involved in this type of crime can they not put these skills to better use? Perhaps it is so lucrative and the sentences are not very high How can customers making use of the internet banking facility assist the banks in reducing the amount of fraud? Discuss as many measures as you can. Do not give out your pin or banking details. Do not let anybody else work on your internet banking. Log off when you are finished. Do not respond to s that ask for private details and pin codes. Do not accept from people you do not know. Be vigilant at all times In your opinion what is the effect of fraud of this nature on the economy of the country. Even if the clients are insured, somebody is losing and this has a negative effect. This results in higher premiums which causes hardships to people. So much money is spent on security that could be better spent elsewhere. Has a negative effect on tourism and investment in the country. TASK 3.8 Bank Statement FIRSTBANK GROUP FirstBank of South Africa Limited Registered Bank PIETERMARITZBURG NORTH Reg. No / PO Box 3211 PIETERMARITZBURG 3200 VAT Reg. No March 20.6 MR G. VAN ROVER PO BOX 991 PIETERMARITZBURG 3200 PIETERMARITZBURG NORTH 7925 Statement No. 231 MONTHLY MAIL Page 1 of 1 BANK STATEMENT / TAX INVOICE Masterplan Cheque Account Account Number: Details Service fees Debits Credits Date Balance BALANCE BROUGHT FORWARD AUTOBANK CASH WITHDRAWAL AT CASCADES 11H INTEREST ON OVERDRAFT CHEQUE ELECTRONIC BANKING PAYMENT: SALARY INTERNET PAYMENT TO TELMOK MCHOICE SERVICE AGREEMENT QW MEDICAL AID OLD MUTUAL INSURANCE PREMIUM CHEQUE ELECTRONIC TRANSFER: R. JACKSON SERVICE FEE These fees are inclusive of VAT at 14.00%. Please verify all transactions reflected on this statement and notify any discrepancies to the bank as soon as possible.

7 3.8.1 State three reasons which indicate that this bank statement refers to a private individual and not a business concern. It is addressed to a private individual and not to a business. The Autobank cash withdrawal at Cascades. Electronic banking payment in respect of salary. A business would make deposits more regularly. Etc Complete the missing details marked *. Indicate overdrawn amounts with a -. E.g. - R19 Refer to the bank statement Mr G. Van Rover made a deposit of R250 on 24 March Give one possible reason why this deposit does not appear on the bank statement. The bank statement is dated 23 rd while the deposit was made on the 24 th Cheque no. 424 for R2 500 was issued during March Give one possible reason why this cheque does not appear on the bank statement. The payee has not presented the cheque to the bank Which transaction indicates that Mr G. Van Rover does internet banking? Internet payment to Telmok Are electronic payments/transfers safer than writing out cheques? Explain. Yes. Cheques can fall in the wrong hands. Cheques can be lost or stolen. Electronic payments are cleared quicker than cheques. Etc. TASK 3.9 Introduction to Bank Reconciliation Calculate the bank balance in the books of G. van Rover on the 23 March CRJ total: R CPJ total: R Bank balance: = R Compare the balance in the bank account to the balance you calculated on the bank statement in the previous Task. Bank statement balance is R while the bank account balance is R Discuss potential problem areas and why the balances do not agree. R250 commission which was deposited on the 23 rd does not appear on the bank statement. Cheque no. 424 for R2 500 in respect of rates and taxes does not appear on the bank statement. R42.45, R579, R789, R1 210 and R49.69 appear on the bank statement but do not appear in the CPJ Process entries that you deem are necessary in order to correct the situation above. You are required to give an explanation as to why you are processing the entries. R250: Record in the Bank Reconciliation Statement (credit side) as an outstanding deposit. The deposit appears in the CRJ but not on the bank statement. R2 500: Record in the Bank Reconciliation Statement (debit side) as an outstanding cheque. The cheque appears in the CPJ but not on the bank statement. R42.45: Record in the CPJ as interest on overdraft. The interest appears on the bank statement but not in the CPJ. R579: Debit/stop order record in the CPJ. R789: Debit/stop order record in the CPJ. R1 210: Debit/stop order record in the CPJ. R49.69: Bank charges record in the CPJ. Updated CPJ total: = R Updated bank balance: = R

8 BANK RECONCILIATION STATEMENT ON 31 MARCH 20.6 Debit Credit Balance as per bank statement Outstanding deposit Outstanding cheques: No Balance as per bank account CASH RECEIPTS JOURNAL FOR MARCH 20.6 CRJ Doc D Details Bank Sundry Details of sundry Transfer 20 Salary Salary Transfer 22 R. Jackson Rent Rec B. Beki Commission CASH PAYMENTS JOURNAL FOR MARCH 20.6 CPJ Doc D Details Bank Sundry Details of sundry ATM 2 Cash Sundry expenses C Mnet TV fees C City Treasurer Rates and taxes Internet 20 Telmok Telephone C Wakefields Rent B/S 23 Firstbank Group Interest on o/draft B/S Mchoice Subscriptions B/S QW Medical Aid Medical aid B/S Old Mutual Insurance B/S Firstbank Group Bank charges

9 TASK 3.11 Khan Stores: Bank Reconciliation CASH RECEIPTS JOURNAL FOR MAY 20.8 KHAN STORES Debtors control Sundry accounts Doc. Cost of D Details Fol Bank Sales Discount No. sales Receipts Amount Fol Details allowed 31 Totals b/f B/S Glow Flora Rent income B CASH PAYMENTS JOURNAL FOR MAY 20.8 CPJ Doc. No. D Details Fol Bank Creditors control Sundry accounts Stationer Creditors Trading Discount y for wages Payments stock Amount Fol Details received 31 Totals b/f B/S J. Sewak (r/d) Debtors control B/S QuikBank Bank charges 287 Interest on o/d B/S Olive Insurers Insurance 100 Drawings B/S J. Khan Drawings B GENERAL LEDGER OF KHAN STORES BALANCE SHEET ACCOUNTS SECTION Dr BANK B Cr May 31 Sundry accounts CRJ May 1 Balance b/d 930 Balance c/d Sundry accounts CPJ BANK RECONCILIATION STATEMENT AS AT 31 MAY 20.8 Debit Credit Balance as per bank statement Outstanding deposit 530 Outstanding cheques: No No Balance as per bank account June 1 Balance b/d CRJ