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CA Foundation · Accounting · Bank Reconciliation Statement

Which one of the following items, found while comparing the cash book with the pass book, will NOT require any entry in the cash book?

A cheque issued but not yet presented needs no cash book entry. The firm already credited the bank column when it issued the cheque, and the difference is only one of timing. The other items arise at the bank and must be recorded in the cash book.

  1. ABank charges debited by the bank
  2. BDirect deposit by a customer into the bank account
  3. CCheque issued to a supplier but not yet presented for paymentCorrect
  4. DDividend collected directly by the bank on behalf of the firm

Explanation

A cheque issued is already credited in the cash book when it is issued. The bank will record it only when it is presented, so this is a timing difference that appears only in the reconciliation statement. Bank charges, direct deposits and dividends collected by the bank are not yet in the cash book and must be entered there.

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