MG has been in business for a number of years as a furniture manufacturer. On 31 August 2022 the bank column of his cash book showed the business had $25600 in the bank account. The bank statement on this date showed a credit balance of $24815. The following transactions were included only in the cash book. Cheque paid to JW $ Cheque received from TH 680 910 In addition, an error had been identified. A standing order for rates of $205 had incorrectly been recorded in the cash book as $255. The following transactions were included only on the bank statement. Dishonoured cheque received from RJ $ Insurance paid by direct debit 420 Bank charges 110 75

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2022). The mark or mark type is shown in brackets.

1. [1] RJ (dishonoured cheque)
2. [1] Insurance (DD)
3. [1] Bank charges
4. [1] Rates (SO) adjustment
5. [1] Balance b/d OF
6. [1] Balance shown in cash book OF
7. [1] Add unpresented cheques JW
8. [1] Less uncredited deposits TH
9. [1] Balance shown on bank statement (Alternative presentation: Balance shown on bank statement, Add uncredited deposits TH, Less unpresented cheques JW, Balance shown in cash book OF)
10. [1] Identify/correct either errors or omissions in the cash book
11. [1] Identify errors on the bank statement
12. [1] Update the cash book/obtain correct bank balance
13. [1] Assist in discovering fraud/deter or reduce risk of fraud
14. [1] Identify amounts not credited
15. [1] Identify cheques not presented
16. [1] Identify out-of-date (stale) and dishonoured cheques
17. [1] Insufficient funds in the bank account
18. [1] No/incorrect signature
19. [1] No date
20. [1] No amount
21. [1] No payee
22. [1] Words and figures disagree
23. [1] A standing order is when a person instructs their bank to pay a fixed sum at fixed intervals to another person
24. [1] A direct debit is when permission is given for a named person to collect an amount from their bank. The dates and amounts can vary
25. [1] Accept - Order: Sales/revenues will increase
26. [1] Accept - Order: May lead to future orders
27. [1] Accept - Order: Increase in profit for the year
28. [1] Accept - Order: Could lose order if no discount given
29. [1] Decline - Order: Existing customers may request a similar discount
30. [1] Decline - Order: Reduction in profit if discount given to all existing customers
31. [1] Decline - Order: May damage relationship of existing customers
32. [1] Decline - Order: Reduction in gross margin
33. [1] Recommendation