UNIVERSITY OF GHANA BUSINESS SCHOOL

DEPARTMENT OF ACCOUNTING
UGBS205: FUNDAMENTALS OF ACCOUNTING METHODS
1ST SEMESTER 2020/2021 ACADEMIC YEAR
TUTORIAL SET 4 – BANK RECONCILIATION STATEMENT
Question 1
a. What is a cash book?
b. What is bank statement?
c. What is bank reconciliation statement?
d. Discuss the importance of bank reconciliation statement
Question 1
a. Identify the two main causes that will lead to a discrepancy between the bank statement
balance and the cash book balance. Give three examples each of the two causes.
b. What is meant by the term “insufficient mandate” in a bank transaction
c. List five reasons for which a bank will dishonour a cheque
Question 2
The following is an extract from the books of Mr. Andy Bissah. Prepare the adjusted cash
book stating the new balance and the bank reconciliation statement as at 31/12/2019.
Cash Book (bank columns)
2019 GH¢’000 2019 GH¢’000
1/12 Balance b/d 16,000 8/12 Faith 11,500
11/12 Prince 8,000 21/12 Francis 3,500
23/12 Loretta 13,000 31/12 Barnes 2,500
31/12 Christian 7,200 31/12 Balance c/d 26,700
44,200 44,200
1/1/14 balance b/d 26,700

Bank statement
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 2019 Withdrawals Deposits Balance
(debit) (credit)
GH¢’000 GH¢’000 GH¢’000
1/12 - Balance b/d 16,000
11/12 -24621(Note) 11,500 4,500
14/12 – Deposit 8,000 12,500
23/12 – 24622 3,500 9,000
29/12 – Deposit 13,000 22,000
30/12 - Bank Giro Credit: Wajul 2,400 24,400
31/12 – Bank charges 4,000 20,400
You can see the following are missing from the cash book:
a. A bank Giro credit GH¢2,400,000 made on December 30 by Wajul.
b. Bank charges of GH¢4,000,000
And you can see that the following are missing from the bank statement
c. A cheque paid to Barnes for GH¢2,500,000 on December 31 has not been presented.
d. A bank lodgment has not yet been credited for GH¢7,200,000 received from Christian on
December, 31.
Question 3
On 31/12/18 Bayor’s bank account showed an overdraft of GH¢41,000,000. On showing the
details on the bank statement which showed a credit of GH¢146,000,000 it was found that the
following had been debited to Bayor’s account in the bank ledger and none of them appeared as
payment on the credit side of the firm’s cash book.
1. Standing order of GH¢14,000,000 for December in respect of motor van being bought
under hire purchase.
2. Trade creditors totalled GH¢30,000,000
3. Interest of GH¢38,000,000 in respect of special bank loan to Bayor. In addition, one of
Bayor’s customers has settled his account by means of a trader’s credit. He instructed his
own bankers to make a direct payment to Bayor. The sum involved was GH
¢245,000,000. No entry has been made in the cash book.
4. Unpresented cheques amounting to GH¢108,000,000.
5. Uncredited cheques GH¢84,000,000.

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 You are required to prepare bank reconciliation statement as at 31/12/18 after adjusting the
cash book.
Question 4
On 30th September, 2019, the cash book of Amando showed a balance of GH¢7,300,000 while
the bank statement showed a balance of GH¢9,928,000.
On investigation, the following errors were discovered.
 Bank charges of GH¢350,000 shown on the bank statement had not been entered in the cash
book.
 A cheque drawn for GH¢470,000 had been entered in error in the cash book as a receipt.
 A cheque for GH¢360,000 received and banked had been returned by the bank marked
“R/D” but this had not been recorded in the cash book.
 The closing balance in the cash book should have been brought down as GH¢8,700,000.
 Two cheques paid to suppliers for GH¢2,140,000 and GH¢3,000,000 had not been presented
to the bank.
 The last page of the paying-in-book showed a deposit of GH¢1,542,000 had not been
credited to the account by the bank.
 The bank had debited a cheque for GH¢720,000 in error to Amando’s account.
You are required to prepare:
(a) Revised cash book
(b) Bank Reconciliation Statement as at 30th September, 2019.

Question 5
Yehoda Consult just received account statement for November 2019 from its bankers, and has
engaged you to reconcile that with its cash book. The account statement and cash book entries
for the month of November 2019 are as follows.

ACCOUNT STATEMENT FOR NOVEMBER 2019

Withdrawal Deposit Balance
Date Narration GH¢’000 GH¢’000 GH¢’000
01-Nov Balance 10,250.00
03- Nov Cash (3,000.00) 7,250.00
05- Nov Cash (22,500.00) (15,250.00)
07- Nov Cheque deposit (GCB, 160042) 5,400.00 (9,850.00)
09- Nov Cheque deposit (ADB, 120123) 17,800.00 7,950.00
13- Nov Cheque deposit (CBG, 110456) 9,500.00 17,450.00
13- Nov Cheque withdrawal (Cheque # 660144) (5,100.00) 12,350.00
15- Nov Cheque withdrawal (Cheque # 660145) (6,000.00) 6,350.00
17- Nov Cheque deposit (GCB, 460642) 560.00 6,910.00

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 18- Nov Cash (8,000.00) (1,090.00)
Credit Transfer (Ref.: Laimie &
21- Nov Associates) 7,800.00 6,710.00
23- Nov Cheque deposit (GCB, 130043) 18,250.00 24,960.00
27- Nov Telephone bill (800.00) 24,160.00
27- Nov Commission (5.00) 24,155.00
28- Nov Cash 18,500.00 42,655.00
30- Nov IFDR monthly charge (5.00) 42,650.00
30- Nov Interest on line of credit (250.00) 42,400.00

CASH BOOK
Date Particulars Amount Date Particulars Amount
GH GH
2019 ¢’000 2019 ¢’000
01-
Nov Balance b/f 10,250 03- Nov Cash 3,000
03-
Nov Dedeede Ltd (GCB, 160042) 5,400 05- Nov Cash 22,500
05-
Nov Gyebi Plc (ADB, 120123) 17,800 07- Nov Atso Ltd (Cheque # 660144) 5,100
10-
Nov Mr. Quarshie (CBG, 110456) 9,500 10- Nov Fiifi-Pee (Cheque # 660145) 6,000
15-
Nov Aprukusu (GCB, 460462) 560 14- Nov Fiifi-Kay (Cheque # 660146) 4,800
19-
Nov Atsu Ltd (GCB, 130043) 18,250 18- Nov Cash 8,000
22-
Nov Mr. Quaye (CBG, 110463) 2,680 22- Nov Pinaman (Cheque # 660147) 17,550
25-
Nov Afrakoma Ent (SCB, 101245) 2,810 28- Nov Opeimu (Cheque # 660148) 2,500
28-
Nov Cash 18,500 30- Nov Balance c/f 16,300
85,750 85,750
01-Dec Balance b/f 16,300

Additional information:
I. You inquired about the IFDR monthly charge, and the bank admitted that it was charged
to the firm’s account in error.
II. The telephone bill of GH¢800,000 was paid by the bank on behalf of the firm in pursuant
to a standing order from the firm. The commission of GH¢5,000 was charged by the bank
for executing that standing order.

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III. You have been informed that the CBG cheque (No. 110463) received from Mr. Quaye
was dishonoured.
Required:
a) Revise the firm’s cash book.
b) Prepare a bank reconciliation statement to reconcile the revised bank balance in the cash
book with the bank statement balance.
Question 6
Kwaku Baaku’s cashbook showed an overdrawn balance of GH¢3,000,000 on 30 th September,
2018 on his current account. The balance as per bank statement was an overdrawn balance of GH
¢800,000.
Further investigations showed the following:
 Cheque drawn amounting to GH¢5,000,000 had not been presented for payment.
 Cheques amounting to GH¢2,500,000 entered in the cashbook as paid into the bank had
not yet been cleared by the bank.
 A cheque book costing GH¢400,000 had been charged in the bank statement but not
entered in the cashbook.
 A dividend of GH¢400,000 paid direct to the bank had not been recorded in the
cashbook.
 A cheque for GH¢1,200,000 drawn on his current account had been charged by the bank
to his deposit account.
 A cheque for GH¢500,000 paid into the bank had been dishonoured and shown as such
by the bank, but no entry has been made in the cashbook.
 The payment side of the cashbook had been undercast by GH¢700,000
 Bank charges of GH¢300,000 entered in the bank statement had not been entered in the
cashbook.
You are required to prepare:
(a) Updated cashbook and Bank reconciliation statement for the month of September.

Question 7
On 31st December, 2017, the balance sheet and income statement of Kalabule Limited showed
the following items: Bank Balance overdrawn GH¢9,000; Profit for the year GH¢50,000. The
balance as stated in the Bank statement did not agree with the one shown in the cash book.
However, upon entries made, the following discrepancies and additional information were
discovered.
A payment of GH¢740 made by a customer was wrongly posted in the cash book as GH¢960.
The following items appeared in the bank statement only.
i. Bank commission GH¢400
ii. Standing charges: loan repayment GH¢24,000
iii. Rent and rates GH¢3,000
iv. Dividend received from Nose Mask Ltd GH¢600
v. Unpresented cheques amounted to GH¢48,000

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 vi. Cheque remittances of GH¢600 and GH¢500 received from customers were
dishonoured.
vii. Uncollectible debts written of was GH¢500
viii. The loan repayment included GH¢4,000 interest charges.
viv. Uncredited cheques amounted to GH¢2,200.
You are required to prepare:
a. The adjusted cash book and The Bank Reconciliation Statement
b. The Revised Income Statement
Question 8
On 30th June, 2019 the cash book of Kweku Edwin Enterprise showed an unfavorable balance of
GH¢239,400 whereas the bank pass book disclosed a balance to his credit of GH¢129,600.
The following cheques drawn by Kweku Edwin were not presented to the bank before 30 th June,
2019.
Payee Amount (GH¢) Date Presented
Benaiah 44,800 July, 3
Mintah 70,800 July, 6
Kingsley 144,600 July, 8
Wosoryie 123,600 July, 11
On further examination of his books, the following were revealed:
(i) Cheques amounting to GH¢150,000 had been recorded in the cash book as having been
paid into the bank on June 30 th, 2019 but were entered in the bank statement on July 1 st,
2019.
(ii) Cheques amounting to GH¢378,000 issued to creditors were not presented for payment
until 10th July, 2019.
(iii) A cheque for GH¢16,200 drawn by Kweku Edmund had been charged to Kweku
Edwin’s account in error by the bank.
(iv)No entry had been made in the cash book for trade subscription of GH¢6,000 paid by
banker’s order in May, 2019.
(v) A cheque for GH¢31,200 received from Yamoah and duly paid into the bank on 6 th May,
2019 was dishonoured but he was not informed of this until 6th July, 2019.
(vi)A dividend for GH¢210,000 less GH¢4,200 tax paid direct to the bank had not been
recorded in the cash book
(vii) On 28th June, 2019, cheques totaling GH¢411,600 paid into the bank were all
dishonoured. He was informed of this on 3rd July, 2019.
(viii) On 30th June, 2019, interest on Kweku Edwin’s treasury bills of GH¢18,000 was
credited to his bank account and the bank charged commission of GH¢1,200, neither of
these items was recorded in the cash book on that date.
Required:
a. Prepare the revised cash book
b. Prepare the bank reconciliation statement as at 30th June, 2019.

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