Skip to content

CA Foundation · Accounting · Bank Reconciliation Statement

Which of the following items would cause a difference between cash book and pass book balances that must be adjusted in the cash book itself (rather than only shown in the reconciliation statement)?

Bank charges debited by the bank but not yet recorded require an entry in the cash book. The firm has not recorded the expense, so its books are incomplete. The other items are timing differences where the firm's records are already correct and only the bank's records lag.

  1. ACheque deposited but not yet collected by the bank
  2. BCheque issued but not yet presented for payment
  3. CBank charges debited by the bank, not yet recorded in the cash bookCorrect
  4. DCheque deposited and credited by the bank in the next month

Explanation

Bank charges are known to the firm only from the bank statement, so the cash book is incomplete and needs an entry crediting the bank. The other items are timing differences where the firm has already recorded the transaction correctly and the bank will catch up later. Hence they only appear in the reconciliation.

Did you get it right without looking?

One question tells you little. A timed set on Bank Reconciliation Statement shows your real accuracy, how long you take and where you lose marks.

Practise Bank Reconciliation StatementFree diagnostic mock

More Bank Reconciliation Statement questions