ACCA Applied Knowledge · Financial Accounting · Bank reconciliations
Which one of the following items would be deducted from the bank statement balance, rather than from the cash book balance, when preparing a bank reconciliation for a business that is in funds?
Unpresented cheques are deducted from the bank statement balance. They are already recorded in the cash book but have not yet cleared the bank. Direct debits, dishonoured cheques and bank charges are instead cash book adjustments because they are on the statement only.
- ACheques issued but not yet presented for paymentCorrect
- BDirect debit not yet recorded in the cash book
- CDishonoured customer cheque not yet recorded in the cash book
- DBank charges not yet recorded in the cash book
Explanation
Items already in the cash book but not yet on the statement are timing differences and adjust the statement balance. Unpresented cheques are deducted from the statement balance. The other three items appear on the statement but not in the cash book, so they adjust the cash book.
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