Pennies make pounds。In business, it‘s not just what you spend and earn that counts, it's how you account for it as well. The accounts of a simple business might just keep track of what has been paid out, what has been received and what is due in. Even so, it is easy to get in a mess. A business makes goods or provides a service. It then needs to record the sales invoices sent out in the sales day book and in the customers sales ledger account (debtors account). Upon payment of the invoice the payment is recorded in the cash book and in the customers sales ledger account.A business will also receive goods or use a service. It then needs to record the invoice received in the purchase day book and in the suppliers purchase ledger account. On paying the invoice the payment is recorded in the cash book and in the suppliers purchase ledger account. Bank reconciliation checks the accuracy of cash book entries against the bank statements. Differences between the bank columns of the cash book and the bank statement may reflect errors made by the business or by the bank; however, they can usually be explained by cheques the business has written out that have yet to be presented to the bank or equally by any uncleared deposits.A petty cash book is used to maintain an office float, for example 50, to pay for miscellaneous office items like stamps, stationery and travelling expenses. The petty cash float cuts down on the need to write out cheques for small items and then have to make numerous bookkeeping entries. However, payments received in the form of notes and coins should be paid into the bank in the normal way and not into the petty cash box. Ideally receipts should be provided for petty cash claims and a petty cash voucher made out for monies paid out. In this way the sum of the receipts, vouchers and petty cash in the box should always equal the float (50). When the float runs low the payments recorded in the petty cash book are totalled up and the equivalent sum is withdrawn from the bank to top up the float to its original level.
Question: There will be no discrepancy between the bank statement and the cash book.
Options:
A. true
B. false
C. uncertain
Answer: C