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CA Foundation · Accounting · Bank Reconciliation Statement

A firm's cash book shows a bank balance of ₹26,000 (debit) before adjustment. A cheque of ₹4,000 received from a customer was entered in the cash book but the customer's account was never credited, and the bank has also credited ₹2,000 interest not yet in the cash book. Which statement about the adjusted cash book balance is correct?

The adjusted cash book balance is ₹28,000 debit. The missing credit in the customer's account is a ledger error that does not change the bank column, so only the ₹2,000 interest credited by the bank is added to the ₹26,000 balance.

  1. A₹28,000, as the customer's account omission does not affect the bank columnCorrect
  2. B₹24,000, because the customer cheque must be deducted
  3. C₹32,000, as both items are added
  4. D₹22,000, because interest is deducted

Explanation

The omission of the credit in the customer's personal account is an error in the ledger, not in the bank column, so the cash book balance is unchanged by it. Only the interest of ₹2,000 credited by the bank is added: ₹26,000 + ₹2,000 = ₹28,000.

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