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ACCA Applied Knowledge · Financial Accounting · Bank reconciliations

At 30 September, Fenwick Ltd's bank statement shows a balance of $14,600. Cheques issued of $4,200 have not been presented. A lodgement of $2,800 made on 30 September has not appeared on the statement. The cash book balance before any adjustment is $13,000 debit, and the only other difference is an unrecorded standing order of $X. What is X?

The unrecorded item is $200. The adjusted balance from the bank statement is 14,600 less 4,200 unpresented cheques plus 2,800 outstanding lodgements, giving 13,200. The cash book shows 13,000, so the difference of 200 is the unrecorded item.

  1. A$200Correct
  2. B$400
  3. C$1,600
  4. D$3,000

Explanation

Adjusted balance from the statement: 14,600 - 4,200 + 2,800 = 13,200. The cash book shows 13,000, so it needs to be increased by 200, which means the unrecorded item is a receipt of $200, not a payment. The question asks for the amount of the difference, which is $200.

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