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JAMB Principles of Accounts 1995 Question 14

Question 14

Banking and Bank Reconciliation

Adama's bank account showed an overdraft of ₦600 on 31st March. On going through the account, it was discovered that the ₦1 080 paid into the account on 29th March had not been credited. What should be the balance in Adama's cash accounts?

  1. A.₦1 680 Dr.
  2. B.₦1 080 Cr.
  3. C.₦600 Dr.
  4. D.₦480 Cr.
Show the answer and explanation

Answer: D (₦480 Cr.)

Explanation

Adding the uncredited deposit to the bank figure: −600 + 1 080 = ₦480 in Adama's favour. Only option D gives ₦480 (in a cash book a favourable balance is normally a debit).