Interpretation of Bank Reconciliation a Tangible Asset Dali's Brick and tile is a hardware store operating from the Umlazi shopping centre in Umlazi Durban the business is owned by D. Dali. You have been appointed as the accountant of this growing business on 1 February 2013, The owner informed you, amongst other things, the following: 1. The financial year of the business ends on 31 January 2013. 2. The business buys all stock on credit. The credit terms allowed by the suppliers are 30 days less 5% discount. 3. The business sells goods for cash and on credit. Credit sales are mainly to building contractors. 4. There are two cashiers in the business. They handle all cash sales at the till points. 5. The third cashier\bookkeeper, Selina (a relative of the owner) is responsible for the following: Receipting all collections from debtors. Collecting delivery charges from the drivers (see no.6) Checking and receiving cash sale taking from the other two cashiers. Preparing the cash for depositing and doing the daily deposits. Writes up the various journals, updates the ledgers and does the monthly bank reconciliation statement. 6. The business employers three drivers for the three vehicles used to deliver goods to customers. A flat rate of R200 is charged for each delivery as the delivery is for a maximum of 30 kilometres. The delivery charges are collected by the drivers who then hand in their daily collections to Selina for depositing. CASE NO 1: Bank Reconciliation On examining the Cash Journals and the Bank Reconciliation statement for November 2012, December 2012, and January 2013, you notice the following: 1. Selina is not depositing all cash received on daily basis, especially in the last week of the month problem 2. A deposit of R13 000 in the CRJ on 20 January 2013 is reflected as R 13.00 on the bank statement. An investigation with the bank indicated that only R13 00 was deposited on that day. She reflected the balance of R11700 as an outstanding deposit in the bank Reconciliation on 31 January 2013. 3. A cheque (no2110) for R2000 was reflected on the bank statement on 28 January 2013 but not in the CPJ for January 2013. An investigation with the bank indicated that the bank statement is correct. In order to complete the reconciliation procedure Selina reflected this cheque as a debit order for an insurance premium for the business premises. Your investigation indicates that the business does not insure its premises.
