ACCA Applied Knowledge · Financial Accounting · Cash
A company's cash book shows a debit balance of $4,820. The bank statement shows a credit balance of $5,630. Comparing the two, the following are found: bank charges of $40 not yet recorded in the cash book, and a customer's direct credit of $350 not yet recorded in the cash book. What is the adjusted cash book balance?
The adjusted cash book balance is $5,130 debit. The unrecorded bank charges of $40 reduce the cash book and the unrecorded direct credit of $350 increases it, so $4,820 minus $40 plus $350 equals $5,130.
- A$5,130Correct
- B$4,430
- C$4,820
- D$5,210
Explanation
Start with the debit balance of $4,820. Deduct bank charges of $40 to get $4,780, then add the direct credit of $350 to get $5,130. Ignoring the charges would give $5,170, and subtracting the receipt would give $4,430.
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