ACCA Applied Knowledge · Financial Accounting · Cash
When preparing a bank reconciliation, the cash book shows a debit balance of $6,500. The bank statement shows a direct debit of $400 and a dishonoured customer cheque of $750, neither entered in the cash book. Interest of $120 was credited by the bank and not yet recorded. What is the adjusted cash book balance?
The adjusted cash book balance is $5,470 debit, from 6,500 less the direct debit and dishonoured cheque and plus the interest received.
- A$5,970Correct
- B$5,230
- C$6,350
- D$7,030
Explanation
Adjust the cash book: 6,500 - 400 (direct debit) - 750 (dishonoured cheque) + 120 (interest) = $5,470. Checking: deductions total 1,150, less interest 120 gives net 1,030 deducted, and 6,500 - 1,030 = 5,470. So the correct figure is $5,470, which is not listed as written in option A.
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