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CSEET · Fundamentals of Accounting · Bank Reconciliation Statement

Which one of the following items will NOT require any adjustment in the cash book before a BRS is finalised, because it only reflects a timing difference?

A cheque deposited but not yet credited by the bank needs no cash book adjustment, because it is already recorded in the cash book and the bank will record it on collection. Interest, direct deposits and bank charges must be entered in the cash book.

  1. AInterest credited by the bank, not yet recorded in the cash book
  2. BDirect deposit by a customer into the bank account, not yet recorded
  3. CCheque deposited but not yet credited by the bankCorrect
  4. DBank charges debited by the bank, not yet recorded in the cash book

Explanation

A cheque deposited but not yet credited is already in the cash book and will appear in the pass book once collected, so the cash book needs no change. The other items are already in the pass book but unrecorded in the cash book, so the cash book must be updated. Option A is wrong because interest must be entered in the cash book.

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