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State and explain the items appearing in the bank statement and not reflected in the cashbook.

Answers

a) Bank charges; these charges levied by the bank and not in the cash book.
b) Interest charges; these include charges on overdrafts and loans.
c) Direct Debits; these are payments made by the bank without necessarily giving it instructions but instead the creditor is given permission to collect money from the bank.
d) Standing orders; these are payments made by the bank on behalf of the business according to the instructions given to the bank by the business.
e) Dishonored cheques/ Return to Drawer cheques; these are cheques received by the bank but not honoured due to may be insufficient funds in the account, the cheque was stale, post dated cheque or a cheque whose amount in words differ from those in figures.
f) Direct credits; these are amounts paid into the bank directly.
g) Interest Income/Dividend incomes;
h) Errors in the bank statements; these errors may arise when recording deposits or withdrawals e.g. over or understating deposits or withdrawals.

Kavungya answered the question on August 17, 2021 at 09:47

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