Question

Enumerate the steps to ascertain the correct cash book balance.

Answer 1

The steps to ascertain the appropriate and correct cash book balance are enumerated below.

Explanation:

Cash book balance is a balance which is derived from a cash book in which all the transactions related to cash get recorded. This balance is recorded in a chronological sequence and verified on a regular basis.  

The steps to ascertain the appropriate and correct cash book balance are enumerated below:

i. Note down the balance according to the cash book's balance.

ii. Rectify the errors that were committed in the cash book.

iii. Record the transactions on the debit and credit side carefully as per the order.

iv. Finally, compute the new and correct cashbook balance.

v. Prepare the statement of bank reconciliation.