CA Foundation · Accounting · Bank Reconciliation Statement
Starting with a cash book debit balance of ₹40,000, Verma Agencies finds: (i) a cheque of ₹3,000 issued to a supplier was entered in the cash book as ₹300; (ii) the bank paid an insurance premium of ₹2,500 under standing instruction, not yet recorded; (iii) a customer's cheque of ₹5,000 deposited was dishonoured and the bank has debited it, not yet recorded. The adjusted cash book balance is:
The adjusted cash book balance is ₹29,800: deducting the ₹2,700 under-recorded payment, the ₹2,500 insurance premium and the ₹5,000 dishonoured cheque from ₹40,000.
- A₹31,800
- B₹34,500
- C₹34,800Correct
- D₹37,300
Explanation
Cheque issued was under-recorded by ₹2,700, so deduct ₹2,700. Deduct the insurance premium of ₹2,500. Deduct the dishonoured cheque of ₹5,000. So 40,000 - 2,700 - 2,500 - 5,000 = ₹29,800. Rechecking the options, none matches ₹29,800, so the key is wrong as listed.
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