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CA Foundation · Accounting · Bank Reconciliation Statement

Which of the following items found during bank reconciliation will require a correcting or adjusting entry in the cash book of the business?

Bank charges debited by the bank but not yet recorded in the cash book require an entry in the cash book. The business learns of them only from the pass book. Timing differences and bank errors need no cash book entry.

  1. ACheque issued to a supplier but not yet presented for payment
  2. BCheque deposited into the bank but not yet credited by the bank
  3. CBank charges debited by the bank but not yet recorded in the cash bookCorrect
  4. DCheque deposited by the business that the bank has wrongly credited to another customer's account

Explanation

Bank charges are known to the business only from the pass book, so the cash book must be adjusted by crediting the bank column. Cheques issued but not presented and cheques deposited but not credited are timing differences that need no entry. A bank error is corrected by the bank, not through the cash book.

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