ACCA Applied Knowledge · Financial Accounting · Cash
Which one of the following items would appear as a reconciling item requiring NO adjustment to the cash book when reconciling to the bank statement?
Unpresented cheques need no cash book adjustment. They are already recorded in the cash book and will clear the bank later, so they are only a timing difference in the reconciliation. Bank charges, dishonoured cheques and interest must be entered in the cash book.
- AUnpresented cheques issued to suppliersCorrect
- BBank charges shown on the statement only
- CA dishonoured customer cheque
- DInterest credited by the bank
Explanation
Unpresented cheques are already recorded in the cash book and are a timing difference, so they only appear in the reconciliation. Bank charges, dishonoured cheques and bank interest are not yet in the cash book and need journal entries.
Did you get it right without looking?
One question tells you little. A timed set on Cash shows your real accuracy, how long you take and where you lose marks.
More Cash questions
- Kestrel Ltd's cash book shows an overdrawn balance of $1,800 before adjustment. The bank statement shows a dishonoured customer cheque for $…
- Which of the following is a purpose of the petty cash book rather than the main cash book?
- A company's cash book shows a debit balance of $4,820. The bank statement shows a credit balance of $5,630. Comparing the two, the following…
- Which item would appear as a cash flow from financing activities in a statement of cash flows prepared under IAS 7?
- Marlow Co's cash book shows a bank balance of $5,000 debit. The following are discovered: a customer's cheque for $640 was returned unpaid b…
- At 31 March, the cash book of Delta Ltd shows a bank balance of $4,200 debit. Cheques issued to suppliers of $1,500 have not yet been presen…