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ACCA Applied Knowledge · Financial Accounting · Cash

Which one of the following items would require an adjustment to the cash book, rather than appearing as a reconciling item on the bank reconciliation statement?

A customer bank transfer on the bank statement but not in the cash book requires a cash book adjustment. Timing differences such as unpresented cheques and uncredited lodgements simply reconcile the two records and need no cash book entry.

  1. AA cheque issued to a supplier that has not yet been presented
  2. BA bank transfer receipt from a customer shown on the bank statement but not in the cash bookCorrect
  3. CCash banked on the last day which the bank has not yet credited
  4. DA cheque issued and recorded in both records but cashed after the period end

Explanation

Items on the bank statement not yet in the cash book, such as direct credits, charges and dishonoured cheques, require cash book entries. Unpresented cheques and outstanding lodgements are timing differences that only appear in the reconciliation.

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