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CSEET · Fundamentals of Accounting · Bank Reconciliation Statement

Which of the following items, when found in the bank statement but not yet in the cash book, requires the cash book balance to be INCREASED when a BRS is prepared starting from the cash book (bank column) balance?

Interest credited by the bank must be added to the cash book balance, because the bank has already increased the account while the cash book has not yet recorded it. Bank charges would be deducted, and timing items like uncollected cheques are already in the cash book.

  1. ACheque issued but not yet presented for payment
  2. BInterest credited by the bankCorrect
  3. CBank charges debited by the bank
  4. DCheque deposited but not yet collected by the bank

Explanation

Interest credited by the bank raises the bank balance but has not been recorded in the cash book, so the cash book balance must be increased. Bank charges would reduce it. Cheques issued but not presented and cheques deposited but not collected are already in the cash book and do not adjust the cash book balance.

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