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ACCA Applied Knowledge · Financial Accounting · Cash

At 31 March, the cash book of Delta Ltd shows a bank balance of $4,200 debit. Cheques issued to suppliers of $1,500 have not yet been presented, and receipts banked of $900 have not yet been credited by the bank. What balance does the bank statement show?

The bank statement shows $4,800 in credit (a positive balance for Delta). Starting from the cash book balance of $4,200, add back unpresented cheques of $1,500 and deduct lodgements not yet credited of $900.

  1. A$4,800 credit
  2. B$5,100 debitCorrect
  3. C$3,600 debit
  4. D$3,300 debit

Explanation

Start from the cash book: 4,200. Bank statement = cash book + unpresented cheques - uncredited lodgements = 4,200 + 1,500 - 900 = 5,100 debit... in the bank's view the customer has a positive balance of $4,800? Re-check: unpresented cheques are still in the bank's balance, so the bank balance is higher by 1,500, and uncleared lodgements make it lower by 900, giving a favourable balance of $4,800. The cash book balance is positive (asset), so the bank statement shows $4,800 in credit from the bank's viewpoint.

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