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Bank – M.T Revision

Ch.1 Ch.2

Current Accounts Local Exchange

Department Operations Department operations

Ch.2 Local Exchange Department Operations

This department includes the following operations:

1. Issuing of bankers draft.
2. Certifying of cheques by stamping them as "acceptable for payment".
3. Issuing of "outward remittance notes".
4. Paying of "inward remittance notes".

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 Ch.2 Local Exchange Department Operations
Comprehensive Exercise (1):
The following transactions were completed by the Nile Bank-
Ramsis Branch during February 2023:
(1) Prepared & issued the following bankers drafts:
S. Applicant Drawee Amount Means of Payee
No. Payment
1 Tamer Taba 10000 Credit current QRS.Co
- client branch account
2 Mohamed - Same 8500 Cash TUV firm
citizen branch
3 Saeed & Co; - Marg 9000 Credit current CD CO;
client branch account
4 Ibrahim Same 12000 Credit current JK
- client branch account Authority
Bank charges & commissions at 0.25 % .

(2) Electronically received inward remittance notes , and then paid them
out in cash:
S. drawer Amount Payee
No.
1 Assuit Branch 4000 Mr.Nagy
2 Cairo Bank- Benha 3000 Mr.Rady
3 Alex Bank-Suez 2500 Ms.Rodina
4 Dokki Branch 1900 Mr.Ref`at

(3) Stamped (certified) 4 Cheques as "Acceptable for Payment":

S. Client Amount Payee Remarks
No.
1 Mr. Fawzi 8000 XYZ Co; Paid in cash
2 Mr. Fakhri 10000 ABC Co; Returned back
3 Mr. Fahmi 6000 Ms Marwa Added to credit current
Co., account.
4 Mr. Farook 7000 “M” agency Paid in cash
Bank charges & commissions at 0.25 %.

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(4) Prepared outward remittance notes as follows:

S. Applicant Drawee Amount Means of Payee

No Payment
.
1 Nancy- Bank Misr - 2500 Credit Neveen
client Kaha current a/c
2 Nashwa Faiyoom 3500 Cash Nour
citizen Branch
3 Nawal- National 4800 Cash Tamer
citizen Bank-Manial
4 Nabil- Ras Ghareb 5900 Credit Karam
client Branch current a/c
Bank charges & commissions at 0.25 % .

(5) Keyed in and electronically transferred the outward remittance notes

issued to drawee branches and local banks .

(6) Paid a banker's draft issued by Helioplis branch in the amount of

L.E.5000, the draft was received before end of Feb.,.,2023.

(7) Added to the credit current account of Al-Ahram Establishment the

amount of a cheque marked as "Acceptable for Payment" in the amount of

L.E.8000, it was certified on mid Jan.,2023.

(8) Electronically received an inward remittance note L.E.10000 from kafr

El-Sheikh Branch payable to Mr.Osama a credit current account client .

(9) Mr.Osama has refused to collect the inward remittance note, so, the

bank has re-transferred it back to Kafr El-Sheikh Branch.

Required :

Make out the necessary journal entries in the books of the Nile Bank-

Ramseis branch during February 2023.

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Answer:
Nile Bank – Ramses
Dr. Cr.
1 Credit current a/c – Tamer (10000+25) 10025
Cash a/c (8500 + 21.25) 8521.25
Credit current a/c – Saeed (9000+22.5) 9022.5
Credit current a/c Ibrahim (12000+30) 12030
Cheques payable a/c 20500
Branches - (Taba branch) a/c 10000
Branches - (Marg branch) a/c 9000
Bank charges & commission a/c 98.75
 To record issuing banker draft issued on request of
clients and citizens. (Bank charges & com. at 0.25%)

2 a) Branches - (Assuit branch) a/c 40000

Local bank - (Cairo bank – Benha) a/c 3000
Local Bank - (Alex bank – Suez) a/c 2500
Branches - (Dokki branch) a/c 1900
Inward remittance notes payable a/c 11400
 To record receiving inward remittance.

b) Inward remittance notes payable a/c 11400

Cash a/c 11400
 To record paying inward remittance notes to the payees.

3 a) Credit current a/c – Mr Fawzi (8000+20) 8020

Credit current a/c – Mr Fakhri (10000+25) 10025
Credit current a/c – Mr Fahmi (6000+15) 6015
Credit current a/c – Mr Farook (7000+17.5) 7017.5
Cheques payable a/c 31000
Bank charges & commission a/c 77.5
 To record stamped 3 cheques as "Acceptable for
payment". (Bank charges & com. at 0.25%).

b) Cheques payable a/c 31000

Cash a/c (8000+7000) 15000
Credit current a/c – Mr Fakhri 10000
Credit current a/c – Ms Marwa 6000
st th
 To record paying 1 and 4 cheques payable in cash. &
nd
returning back the 2 cheque payable & addition of the
3rd cheques payable to credit current a/c of payee

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 4 Credit current a/c – Nancy (2500 + 6.25) 2506.25
Credit current a/c – Nabil (5900 + 14.75) 5914.75
Cash (4800 + 12) + (3500 + 8.75) 8320.75
Outward remittance notes a/c 16700
Bank charges & commission a/c 41.75
 To record issuing outward remittance notes. (Bank
charges & com. at 0.25%)
5 Outward remittance notes a/c 16700
Local bank - (bank Misr – Kaha) a/c 2500
Branches - (Faiyom branch) a/c 3500
Local bank - (N. B. Maniel) a/c 4800
Branches - (Ras Ghareb branch) a/c 5900
 To record sending outward remittance to drawees.
(branches and local banks).
6 a) Branches - (Helioplis branch) a/c 5000
Cheques payable a/c 5000
 To record receiving of issuing banker draft by Helioplis
branch.
b) Cheques payable a/c 5000
Cash a/c 5000
 To record paying cheques payable.

7 Cheques payable a/c 8000

Credit current a/c – Al-Ahram 8000
 To record the addition of cheques p. to cr. Current a/c

8 Branches - (Kafr El-Sheikh branch) a/c 10000

Inward remittance notes payable a/c 10000
 To record receiving inward remittance notes from branch.

9 Inward remittance notes payable a/c 10000

Branches - (Kafr El-Sheikh branch) a/c 10000
 To record returned back inward remittance notes, because
the refusing of payee to collect.

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 MCQs on the previous comprehensive exercise on ch.2

Q 1: in transaction no.1, cash a/c is debited with:

a. 10,025 b. 8,500 c. 8,521.25 d. 20,500

Q 2: in transaction no.1, cheques payable a/c is credited with:

a. 10,025 b. 8,500 c. 8,521.25 d. 20,500

Q 3: in transaction no.1, The total of Bank charges & commission a/c is credited
by:
a. 30 b. 55.5 c. 98.75 d. 45.5

Q 4: in transaction no.1, The total credit of branches a/c is:

a. 19,000 b. 10,000 c. 9,000 d. 20,500

Q 5: in transaction no.2, The total credit to Inward remittance notes payable a/c
is:
a. 11,400 b. 41,900 c. 5,500 d. 40,000

Q 6: in transaction no.2, The total of Local Bank a/c is debited by:

a. 11,400 b. 41,900 c. 5,500 d. 40,000

Q 7: in transaction no.3, The total Bank charges & commission a/c is:
a. 20 b. 55.5 c. 77.50 d. 60

Q 8: in transaction no.3, the Credit current a/c – Fahmi is:

a. Debited b. Credited c. Debited d. Credited
with 6000 with 6000 with 6015 with 6015

Q 9: in transaction no.4, The total Outward remittance notes a/c is:

a. Credited b. Credited c. Debited d. Debited
with 16,700 with with with
16,741.75 16,700 8,320.75
Q 10: in transaction no.4, the Credit current a/c – Nancy is:
a. Debited b. Credited c. Debited d. Credited
with 2500 with 2500 with with
2506.25 2506.25

Q 11: in transaction no.5, The total branches a/c is credited by:

a. 9,400 b. 3,500 c. 4,800 d. 16,700

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Q 12: in transaction no.5, To record sending outward remittance to drawees.
(branches and local banks)., the debit side is:
a. Inward remittance notes a/c
b. Outward remittance notes a/c
c. Central Bank (clearing house) a/c
d. Cheques payable a/c

Q 13: in transaction no.6, To record receiving of issuing banker draft by

Helioplis branch, the debit side is:
a. Branches - (Helioplis branch) a/c
b. Local bank - (Helioplis branch) a/c
c. Cheques payable a/c
d. Correspondents – (Helioplis branch) a/c

Q 14: in transaction no.6, To record receiving of issuing banker draft by

Helioplis branch, the credit side is:
a. Branches - (Helioplis branch) a/c
b. banker draft a/c
c. Cheques payable a/c
d. Correspondents – (Helioplis branch) a/c

Q 15: in transaction no.6, To record paying of the banker draft, the debit side is:
a. Branches - (Helioplis branch) a/c
b. Banker draft a/c
c. Cheques payable a/c
d. Cash a/c

Q 16: in transaction no.7, the Credit current a/c – Al-Ahram is:

a. Debited b. Credited c. Credited d. None of the
with 8000 with 8000 with 800 foregoing

Q 17: in transaction no.7, To record the addition of cheques payable to Cr.

Current a/c of the client, the debit side is:
a. Banker draft a/c
b. Inward remittance notes a/c
c. Credit current a/c – Al-Ahram
d. Cheques payable a/c

Q 18: in transaction no.8, To record receiving inward remittance notes from

branch, the credit side is:
a. Banker draft a/c
b. Inward remittance notes payable a/c
c. Branches a/c
d. Cheques payable a/c

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Q 19: in transaction no.8, To record receiving inward remittance notes from
branch, the debit side is:
a. Banker draft a/c
b. Inward remittance notes payable a/c
c. Branches a/c
d. Cheques payable a/c

Q 20: in transaction no.9, To record returned back inward remittance notes,

because the refusing of payee to collect, the debit side is:
a. Outward remittance notes a/c 10,000
b. Inward remittance notes payable a/c 10,000
c. Branches a/c 10,000
d. Cheques payable a/c 10,000

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Exercise (2):
The following transactions were completed by the Local Exchange
Department in Bank Misr- Manial Branch during 2022:

1. a) Issued bankers' drafts on requests by clients: Ogress & Cobra &

Python, and citizen; Ogre as follows:

Applicants Payees Drawee Bank L.E. Char. & com.

i) Ogre Palms Co., Siwa branch 40000 1 ‰.
(citizen)
ii) Ogress Marsa Co., Same branch 50000 1 ‰.

iii) Cobra Xerox Co., Audi bank/Agoza 60000 2 ‰.

iv) Python Global Co., Same branch 70000 1 ‰.

b) * Bankers' drafts i ,ii, & iii were collected in cash by the payees,
* bankers' draft iv was returned back by the client .

2. Received a notification from Alex., branch that it has drawn a bankers

draft against the branch 50000, the payee is Misr Co., in King Mariot .

3. Certified two cheques as acceptable for payment drawn by two Clients,

as follows:

a. Sea Gulls Co., 200000, the payee is Al-Amriya Cement Co.,

b. Swan Sea Co., Ltd., 150000, the payee is Egypt Railway Authority.
Bank charges & commissions at 1 ‰.

4. Client Ashraf has returned back a cheque certified as acceptable for

payment 150000, the payee was Andromeda Stores.

Required:
Record the above transactions in the books of Bank Misr--Manial

branch during 2022.

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Answer: Bank Misr--Manial branch
Dr. Cr.
Cash a/c 40000 + (1‰x 40000) 40040
1 a) Credit current a/c –Ogress 50000 + (1‰x 50000) 50050
Credit current a/c –Cobra 60000 + (2‰x 60000) 60120
Credit current a/c –Python 70000 + (1‰x 70000) 70070
Cheques payable a/c (50000 + 70000) 120000
Branches - (Siwa branch) a/c 40000
Local banks - (Audi bank-Agoza) a/c 60000
Bank charges & commission a/c 280
 To record issuing banker draft issued on request of
clients and citizen.
b) Cheques payable a/c 120000
Cash a/c 50000
Credit current a/c – Python 70000
 To record payment of the second banker draft (L.E
50000) in the same branch. & record the return back
of the fourth banker draft.
2 Branches - (Alex branch) a/c 50000
Cheques payable a/c 50000
 To record the bankers draft drawn upon us by our
branch in Alex.
3 Credit current a/c – Sea Gull Co. (200000+200) 200200
Credit current a/c – Swan Sea Co. (150000+150) 150150
Cheques payable a/c 350000
Bank charges & commission a/c 350
 To record stamped 2 cheques as "Acceptable for payment",
(Bank charges & commissions at 1‰).
4 Cheques payable a/c 150000
Credit current a/c – Ashraf 150000
 To record the return back of a cheque certified as
acceptable for payment.

☺ Notice that: Referring to transaction no.1 (b):

 No entry for payment of the 1st and 3rd banker drafts; because it
was drawn on other branch and local bank.

 i.e the other branch or local bank, who is paying the drafts not me
(Bank Misr--Manial branch)

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