When preparing a bank reconciliation, which of the following items requires an adjustment to the business's cash book rather than to the bank statement balance?

Correct answer: A) Bank charges shown on the bank statement but not yet recorded by the business

Explanation

Bank charges are genuine transactions that the business has not yet recorded, so they must be entered in the cash book. Unpresented cheques and outstanding lodgements are timing differences: the cash book is already correct, and they are adjusted on the bank statement side of the reconciliation. A bank error is corrected by the bank, so it is also shown as an adjustment to the statement balance.