ACC2208 Accounting Practices Assignment 3: Cash Management Solutions

This document presents solutions for ACC2208 Accounting Practices Assignment 3, focusing on practical cash management skills. The assignment requires students to prepare a bank reconciliation statement, reconcile the company's cash account with the bank statement, and set up and manage a petty cash account by recording daily transactions. The solution provides a detailed bank reconciliation as of April 30, 2011, including adjustments for deposits in transit, service charges, NSF checks, and unrecorded collections and interest revenue. It also includes all necessary journal entries. Furthermore, the document provides a petty cash ledger, journal entries for establishing and managing the petty cash account, and the calculation of cash over or short, along with the relevant journal entries. The document is designed to help students understand and apply key accounting principles related to cash management within the context of an office administrative assistant role.

Solution 1:
Bank Reconciliation as on April 30, 2011
Particulars Amount
($)
Balance as per books 6,823.78
Less:
Deposit in transit not received by bank (1,487.98)
Service charges not recorded in books (25.00)
NSF cheque returned by bank (1304.18)
Add:
Collection not recorded in books 600.00
Interest revenue 45.00
Cheque #321 returned but not recorded in bank statement 592.06
Cheque #368 returned but not recorded in bank statement 23.75
Balance as per banks 5,267.43
Journal Entries
Particulars Debit Credit
Accounts receivable 1,304.18
Deposit in transit 1,487.98
Service charges 25.00
Accounts receivable 600.00
Interest revenue 45.00
Accounts payable 592.06
Accounts payable 23.75
Cash 1,556.35
(To record BRS Entries)
Solution 2:
Journal entry:
Date Accounts Debit Credit
Oct 1 Petty Cash 200.00
Cash in hand 200.00
(To record establishment of petty cash a/c)

Petty cash ledger:
Date Vouche
r #
Description Receipt
s
Payment
s
Postage
Expens
e
Taxi
Expens
e
Other Accoun
t
Oct
01
1 Cash in hand 200.00 200.00
Oct’1
5
2 Entertainmen
t expenses
65.00 65.00
Oct’1
7
3 Postage
expenses
35.75 35.75
Oct’2
3
4 Taxi
expenses
16.80 16.80
Oct’3
1
5 Deliveries
exp
80.00 80.00
Total 200.00 197.55 35.75 16.80 145.0
0
200.00
Less:
payments
197.55
Balance C/F 2.45
Calculation of cash over/ short:
Particulars Amount
Closing petty cash balance in hand 15.25
Closing cash as per petty cash ledger 2.45
Cash over 12.80
Journal entry for cash over:
Particulars Debit Credit
Cash 12.80
Cash over and short a/c 12.80
(To record cash over and short)