ACCA FA · Chapter 10 · Question 8 of 12
A business's cash book shows a debit balance of $5,420. When compared with the bank statement, the following items are found: Unpresented cheques $2,860 Outstanding lodgements $1,940 Bank charges not in the cash book $85 Direct debit not in the cash book $300 Credit transfer from a customer not in the cash book $640 What is the corrected cash book balance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) $5,675
Explanation
Only items not yet recorded in the cash book are adjusted there: $5,420 - $85 - $300 + $640 = $5,675. Unpresented cheques and outstanding lodgements are timing differences that affect the bank statement balance, not the cash book. $6,595 is the bank statement balance.
More Trial balance, errors, control accounts and bank reconciliations MCQs
- Q10Which of the following items in a bank reconciliation requires an adjustment to the cash book?
- Q11A business's bank statement shows an overdraft of $1,200. There are unpresented cheques of $900 and a lodgement of $400 has not yet been…
- Q12A business sells goods to a customer who is also a supplier, and the two balances are set off against each other. What is the double entry…
- Q1Which of the following errors would cause the totals of a trial balance to disagree?
- Q2Repairs to a factory building were debited to the buildings (non-current asset) account. What type of error is this?