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Need help with accounting exam

[Deleted User][Deleted User] Posts: 67
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in Advice #1
I have my exam tomorrow and im a little confused on a question, i think im over thinking it lol

Your line manager has just received a bank statement which shows a closing
balance which is a completely different figure from the cash book figure.
a Explain why an overdraft on the bank statement is shown as a debit
balance yet in the cash book it is shown as a credit balance.

My first thoughts were you have taken money from the overdraft causing the debit balance and then put this money into the cashbook causing it to show a credit balance.

Is it really this simple or have i confused myself, its only worth 2 marks.

Also not too sure what control procedures are :(
Explain why control procedures are so important and describe two further
control mechanisms associated with the cash book

Any help would be gratefully appreciated

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    [Deleted User][Deleted User] Posts: 424
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    #2
    Two thoughts:
    1) If the exam's tomorrow, how do you know a question? Or is that how they do exams these days?

    2) By "different figure" I assume you mean the same absolute (i.e. unsigned) amount.

    If you don't know why an amout would be shown in one party's books as a debit and in the other party's as a credit, nor why, specifically, a debt is a debit balance to one and a credit balance to the other, then in my opinion you shouldn't be even be considering taking an accountancy exam.

    It may be that the question is more complex than I think; if this is the case, my apologies.
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    whitecliffewhitecliffe Posts: 12,153
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    #3
    kimzy1986 wrote: »
    I have my exam tomorrow and im a little confused on a question, i think im over thinking it lol

    Your line manager has just received a bank statement which shows a closing
    balance which is a completely different figure from the cash book figure    .

    Your cash book will show all transaction whether they have cleared through the bank or not, you would reconile or agree to the bank statement by adding on uncleared payment and deducting uncleared receipts

    a Explain why an overdraft on the bank statement is shown as a debit
    balance yet in the cash book it is shown as a credit balance    .

    The bank statement reflects your company's position with the bank, it is effectively their record. Assuming you are the bank, money owed to them (ie an overdarft) would be reflected as a debit balance
    The cash book is your company's ledger or record, it reflects that you owe the bank money and this would be a credit.
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    [Deleted User][Deleted User] Posts: 67
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    #4
    its a mock exam im working through and they have questions from previous exams as a guide, i do know what a credit and debit is but i just dont think the exam would be as easy as that, i also did the cashbook unit about 3 years and don't have my notes so this is why i am unsure. but it is only worth 2 marks so i may just put the answer i have and hope for the best
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