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CMA Foundation · Fundamentals of Financial and Cost Accounting · Cash Book, Bank Book, Petty Cash Book, Bank Reconciliation Statement

While preparing a bank reconciliation statement starting from the cash book debit balance, which of the following items must be ADDED to arrive at the pass book balance?

Cheques issued but not yet presented are added. The cash book has already reduced the balance for them, while the bank has not yet paid them, so adding them back moves the cash book balance up to the pass book balance.

  1. ACheques deposited but not yet credited by the bank
  2. BCheques issued but not yet presented for paymentCorrect
  3. CInterest credited by the bank not yet recorded in the cash book
  4. DBank charges debited by the bank not yet recorded in the cash book

Explanation

Starting from the cash book balance, only items already recorded in the cash book but not in the pass book are added or deducted to reach the pass book. Cheques issued but not presented have reduced the cash book but not the bank balance, so they are added back. Deposits not credited are deducted. Interest and charges are bank-side items that need correction in the cash book, not reconciling items when moving to the pass book in this approach.

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