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CMA Intermediate · Financial Accounting · Accounting Fundamentals

Which of the following items would cause the cash book balance to differ from the pass book balance, and requires NO adjustment in the cash book when preparing a Bank Reconciliation Statement (BRS)?

Cheques issued but not yet presented need no cash book adjustment because the business has already recorded the payment. The difference is only one of timing and is shown in the reconciliation statement. Bank charges, interest and direct deposits must be entered in the cash book.

  1. ABank charges debited by the bank but not yet recorded in the cash book
  2. BCheque issued to a supplier but not yet presented for paymentCorrect
  3. CInterest credited by the bank not yet recorded in the cash book
  4. DDirect deposit by a customer into the bank account not yet recorded in the cash book

Explanation

A cheque issued but not yet presented is already credited in the cash book; the bank will record it later, so it is a timing difference that only appears in the BRS. Bank charges, interest and direct deposits are not yet in the cash book and need cash book entries.

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