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ACCA Applied Knowledge · Financial Accounting · Bank reconciliations

When updating the cash book from a bank reconciliation, which of the following items requires an adjustment to the cash book?

A bank charge shown only on the bank statement requires a cash book adjustment, because the business has not yet recorded it. Unpresented cheques and uncleared lodgements are already in the cash book and are merely timing differences, so they only feature in the reconciliation statement.

  1. AAn unpresented cheque issued to a supplier
  2. BA bank charge shown on the statement onlyCorrect
  3. CA lodgement made on the last day and not yet cleared
  4. DA cheque issued before the year end and not yet cashed by the supplier

Explanation

Bank charges appear on the statement but not yet in the cash book, so the cash book must be updated. The other items are already recorded in the cash book and are only timing differences, so they appear in the reconciliation but need no cash book entry.

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