As at 31st December 2025, the Cash Book (bank column) of Zenith Enterprises showed an unadjusted credit balance (overdraft) of . Upon audit and comparison with the Bank Statement, the following discrepancy items were identified:
| Item | Transaction Details | Amount (NGN) |
|---|---|---|
| 1 | Bank charges and interest on overdraft not entered in Cash Book | |
| 2 | Direct remittance by a customer credited directly by the bank | |
| 3 | Cheque issued to a supplier for incorrectly credited in Cash Book as | |
| 4 | Cheques drawn and issued to creditors but not yet presented at bank | |
| 5 | Cheques lodged into the bank account but not yet credited by bank | |
| 6 | Standing order for annual subscriptions debited by bank only | |
| 7 | Customer's cheque previously deposited, now returned dishonoured |
What is the amount of the bank overdraft per the Bank Statement as at 31st December 2025?
Answer: 13750 NGN
Answer
The bank overdraft per the Bank Statement as at 31st December 2025 is NGN 13,750.
To find the Bank Statement balance, first adjust the Cash Book overdraft of NGN 14,500. Add omitted payments and corrections (bank charges NGN 2,050, cheque under-recording NGN 1,800, standing order NGN 2,000, dishonoured cheque NGN 1,500) to get an overdraft subtotal of NGN 21,850. Subtract the direct credit of NGN 5,400 to obtain an Adjusted Cash Book overdraft of NGN 16,450. Reconciling to the bank statement: add uncredited lodgements of NGN 6,200 and subtract unpresented cheques of NGN 8,900, yielding a Bank Statement overdraft of NGN 13,750.
Step-by-Step Solution
Key Concept
Preparation of Adjusted Cash Book and Bank Reconciliation Statement under overdraft conditions
Estimated Time:3m 0s