AC1103 Group 7

What is the primary purpose of a bank reconciliation statement?

• Reconcile cash account and bank statement differences

• Record bank charges & interest in company books

• Prepare entries for prepaid expenses

• Identify errors in financial statements

When a company issues a 2-for-1 share split, _______

• Number of shares issued remains unchanged

• Par Value of each share is doubled

• Number of shares issued doubles, share capital remains unchanged

• Adjusted retained earnings

What is affected when a company writes off an Accounts Receivable balance?

• Cash

• Accounts Receivable

• Interest Income

• Allowance for impairment of Accounts Receivable

Main reason for setting up an Allowance for Impairment account

• Recognise actual bad debts collected

• Write off bad debts directly as they occur

• Estimate future bad debts for financial reporting

• Adjust cash flows for expected receivable losses

Which would NOT require a journal entry in a company's records?

• Purchase of treasury shares

• Issuance of ordinary shares

• Cash dividend payment

• 2-for-1 share split