FSTP Question Please help

sshssh Just JoinedPosts: 21Registered
Could someone please tell me how to work out opening balance in the cashbook?

Bank balance 31March 20x6 £1327 Debit , 31March 20x7 not available
The totals recorded in the cashbook for the year ended 31 March 20x7
Receipts = £200,100 Payments = £205,158
Assuming there are no year end adjustments, what will be the opening balance (DR or CR) in the cashbook as at 1 April 20x7?

Thanks
x
Chris44

Comments

  • ariadneariadne Posts: 218Registered
    You are actually working out the closing balance for the year given, this becomes the opening balance for the new year. Does that make it easier to figure out?

    If not you add the opening balance to the receipts (money in) and then deduct the payments (money out). The trickier bit is which side to enter the transaction. The opening balance is the opposite side to the closing balance. It's good to write up a ledger account if this isn't part of the question, it's easier to see which side the balance falls on. You can see the payments are greater than receipts and opening balance so the closing balance is on the Debit side and opening a Credit. There is a tutorial on missing records on MyAAT which helps to explain it in more detail.
    sshChris44
  • sshssh Just Joined Posts: 21Registered
    Thank you. That's really helpful :)
  • welshwizardwelshwizard Trusted Regular South WalesPosts: 465Registered
    For any question like this, go back to basics and use a t-account. You'll always find the figure you're looking for then (provided you're fully conversant with the rules of double entry)
    ssh
  • sshssh Just Joined Posts: 21Registered
    Passed my FSTP exam yesterday and exceeded in all questions. Thanks for your help and suggestion. I agree, it's all about sticking to the basics and using small t accounts really helps.
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