ICAEW AF · Chapter 5 · Question 8 of 9
When reconciling its bank account, a business notices that the bank has debited its account with £300 for a cheque that was actually written by a different customer of the bank. How should this be dealt with?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Add £300 to the bank statement balance in the reconciliation and ask the bank to correct the error
Explanation
The business's cash book is correct; the error has been made by the bank, which has wrongly reduced the business's balance by £300. The cash book is not adjusted. In the reconciliation, £300 is added back to the bank statement balance to arrive at the correct figure, and the bank is asked to reverse its entry.
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