Home For AAT student members AQ 2016 Advanced Diploma in Accounting Final Accounts Preparation

Help with Bank reconstruction in sample assessment! Exam is on Monday!

Hi all.
Please please can someone shed some light on this for me (and our study group!)?

We are sitting our Final Accounts exam on Monday and are just doing sample assessment 2 on the AAT website. We are totally confused by the bank reconstruction in task 1 b) so any help would be much appreciated (Sorry its a Friday night!) as we are panicking a bit!






Bank Ledger reconstruction - finding the Cash Purchases

The question states that the Balances as at : 31st mar x6 : £3283 credit 31st Mar x7 : £1568 debit

I assume this is a ledger bank balance, so then opening balance would be a credit and closing balance debit. However when you look at the model answers (second screen shot) AAT have put both balances on credit side? Why is this?

It still doesn't make sense to me why they have done this as both Credit b/d and c/d - as if we consider balances as at end of previous closing year (opening balance of X7) then this would be a debit?

As you can see there is alot of confusion regarding the Debits and Credits. So if someone can explain why both the b/d and c/d is Credit and why this contradicts the info given in the question that would be absolutely amazing!

Thanks so much in advance
Sarah

Answers

  • Pian32Pian32 MAAT Posts: 390
    edited March 2020
    The b/d balance from one period will be on the opposite side to the c/d balance from the previous period.

    This is due to the c/d figure acting as a balancing amount it will always be on the opposite side to the balance of the accounts (If account is in credit the c/d figure appears as a debit and visa versa). This is done as part of the process of transferring balances to the Balance sheet at the end of the year.

    Your b/d balance for the period starting on 1st April 20X7 would have the figure as a Debit.

    Sorry I wasn't in time for your exam I have been away. I hope this helps for the future.
    AAT Level 4, MAAT
    ACCA in progress
    F4- Passed Aug 2020
    F5- Passed Dec 2020
    F6- Passed Sep 2020
    F7- Planned June 2021
    F8
    F9 - Planned June 2021
Sign In or Register to comment.