CMA Intermediate · Corporate Accounting and Auditing · Audit of Various Items of Financial Statements
The cash book of Kaveri Traders Ltd. shows a bank balance of ₹4,60,000 on 31 March. Cheques issued of ₹55,000 have not yet been presented, and cheques deposited of ₹30,000 have not yet been credited by the bank. The bank also charged ₹2,000 as fees, not yet entered in the cash book. What balance should the bank statement show?
The bank statement should show ₹4,83,000. Adjust the cash book for bank charges to ₹4,58,000, add unpresented cheques of ₹55,000, and deduct deposits not yet credited of ₹30,000. This reconciles the cash book to the bank statement.
- A₹4,31,000
- B₹4,83,000Correct
- C₹4,87,000
- D₹4,35,000
Explanation
Adjusted cash book = 4,60,000 - 2,000 = 4,58,000. Bank statement balance = 4,58,000 + 55,000 (unpresented cheques) - 30,000 (uncredited deposits) = 4,83,000. Option ₹4,87,000 results from adding the bank charge instead of deducting it.
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