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Inventory Valuation and Bank Reconciliation
Quick questions on Updating the cash book explained: O-Level Principles of Accounts
5short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is two kinds of difference?Show answer
When the cash book and the bank statement disagree, the differences fall into two groups:
What is items entered in the cash book?Show answer
These are transactions the business learns of only from the bank statement, so the cash book is wrong without them:
What is q1?Show answer
State whether each is debited or credited in the cash book when updating: bank charges, interest received, a dishonoured cheque. [3 marks]
What is q2?Show answer
A cash book debit balance is \1,500\ and interest received is \20$. State the corrected balance. [2 marks]
What is q3?Show answer
Explain why a standing order is entered in the cash book rather than the reconciliation statement. [2 marks]
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