ACCA Applied Knowledge · Financial Accounting · Cash
At 31 March, a company's cash book shows a bank balance of $4,200 debit. A bank statement check finds bank charges of $150 not yet recorded in the cash book. What is the correct adjusted cash book balance?
The adjusted cash book balance is $4,050 debit. Bank charges not yet recorded must be credited to the cash book, reducing the balance from $4,200 by $150. Adding the charges instead would be a sign error and give $4,350.
- A$4,350 debit
- B$4,050 debitCorrect
- C$4,050 credit
- D$4,200 debit
Explanation
Bank charges are an expense that reduces the bank balance, so the cash book is credited with $150. Adjusted balance = $4,200 - $150 = $4,050 debit. Adding the charges ($4,350) uses the wrong sign.
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