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JAMB Principles of Accounts 2006 Question 22

Question 22

Banking and Bank Reconciliation

A. S. Danbuzu's Bank Statement
Date | Particulars | Debit (₦) | Credit (₦) | Balance (₦)
Jan. 1 | Opening balance | | | 10 000
Jan. 3 | Bashir A. K. | 1 000 | | 9 000
Jan. 10 | Usman A. D. | 1 500 | | 7 500
Jan. 12 | Sule A. S. | 500 | | 7 000
Jan. 20 | Aliyu A. K. | | 3 000 | 10 000
Jan. 30 | X | 1 500 | | Y
X represents

  1. A.bank charges
  2. B.an unpresented cheque
  3. C.dividends
  4. D.an uncredited cheque.
Show the answer and explanation

Answer: A (bank charges)

Explanation

X is a debit made by the bank without a customer's name, i.e. a bank charge. Unpresented and uncredited cheques do not appear on the statement, and dividends would be a credit.