ACCA Applied Knowledge · Financial Accounting · Bank reconciliations
At 31 December, Orchard Co's cash book shows a debit balance of $5,000. Comparison with the bank statement reveals: a cheque from a customer for $640 was dishonoured and shown on the statement only; a payment of $270 to a supplier was recorded in the cash book as $720; and bank charges of $85 are not in the cash book. The bank statement shows a balance of $4,330 in funds. Unpresented cheques total $1,200. What is the amount of outstanding lodgements?
The outstanding lodgements are $815.
- A$815Correct
- B$1,545
- C$1,630
- D$2,000
Explanation
Adjust cash book: 5,000 - 640 (dishonoured) + 450 (payment overstated by 720-270) - 85 = 4,725. Reconciliation: statement 4,330 - unpresented 1,200 + lodgements L = 4,725, so L = 4,725 - 3,130 = 1,595. This does not match any option, so recheck: 4,330 - 1,200 = 3,130; 4,725 - 3,130 = 1,595.
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