ICAEW AF · Chapter 5 · Question 4 of 9
After all necessary adjustments, a business's cash book shows a debit balance of £2,315. Unpresented cheques total £3,780 and lodgements not yet credited by the bank total £2,150. What balance is shown on the bank statement?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) £3,945 in favour of the business
Explanation
Working from the cash book to the bank statement reverses the usual reconciliation. Unpresented cheques have been deducted in the cash book but not yet by the bank, so the bank balance is higher by £3,780. Outstanding lodgements are in the cash book but not yet in the bank, so the bank balance is lower by £2,150. Bank statement = £2,315 + £3,780 - £2,150 = £3,945 in favour of the business.
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