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CSEET · Fundamentals of Accounting · Bank Reconciliation Statement

Which of the following is a timing difference that causes the cash book balance and the pass book balance to differ?

A cheque issued but not yet presented for payment is a timing difference. The firm has already credited its cash book, but the bank will record it in the pass book only upon presentation. The other options are errors needing correction in the cash book.

  1. AA cheque issued to a supplier but not yet presented for payment at the bankCorrect
  2. BA cheque deposited by the firm that is recorded twice in the cash book by mistake
  3. CCash book total of the payments side added up wrongly
  4. DA payment entered on the receipts side of the cash book

Explanation

A cheque issued but not yet presented is recorded in the cash book but not yet in the pass book, so it is a timing difference that resolves itself. The other options are errors in the cash book which need correction in the cash book itself. Option B is wrong because a duplicate entry is an error, not a timing difference.

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