Skip to content

ACCA Applied Knowledge · Financial Accounting · Bank reconciliations

Which of the following items would require a journal entry in the cash book when a bank reconciliation is prepared?

Interest charged by the bank on an overdraft requires a cash book entry, because the bank has recorded it but the business has not. Unpresented cheques and uncleared lodgements are timing differences already in the cash book, so they only appear in the reconciliation.

  1. AInterest charged by the bank on an overdraftCorrect
  2. BA cheque issued to a supplier but not yet presented
  3. CReceipts banked on the last day but not yet credited by the bank
  4. DA cheque received from a customer and banked, awaiting clearance

Explanation

Bank charges and interest appear on the statement but are not yet in the cash book, so the cash book must be updated. Unpresented cheques and outstanding lodgements are timing differences already in the cash book and need no entry; they simply appear in the reconciliation.

Did you get it right without looking?

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

Practise Bank reconciliationsFree diagnostic mock

More Bank reconciliations questions