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CA Foundation · Accounting · Bank Reconciliation Statement

Which of the following items, found while reconciling the cash book with the pass book, requires an entry in the cash book to bring it up to date (an adjusted cash book)?

Interest collected directly by the bank needs an entry in the cash book, because the bank has recorded it but the business has not. Unpresented cheques and uncredited deposits are already in the cash book and only cause timing differences.

  1. ACheque issued to a supplier but not yet presented for payment
  2. BCheque deposited in the bank but not yet credited by the bank
  3. CInterest on investments collected directly by the bank and not yet recorded in the cash bookCorrect
  4. DCheque deposited and credited by the bank in the next month, with the credit date after the reconciliation date

Explanation

Items that the bank has already recorded but the business has not (interest collected, charges, direct deposits, dishonours) require cash book entries. Uncredited deposits and unpresented cheques are timing differences already recorded in the cash book, so they only appear in the reconciliation statement.

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