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CSEET · Fundamentals of Accounting · Bank Reconciliation Statement

While preparing a Bank Reconciliation Statement, which one of the following items requires an entry in the cash book (bank column) to bring it up to date?

Bank charges debited by the bank but not yet recorded need a cash book entry. The firm learns of them only from the bank statement. Uncleared cheques issued or deposited are already in the cash book, so they are timing differences needing no adjustment.

  1. ACheque issued but not yet presented for payment
  2. BCheque deposited but not yet credited by the bank
  3. CBank charges debited by the bank but not yet recorded in the cash bookCorrect
  4. DCheque deposited that the bank has not yet collected

Explanation

Items already recorded in the cash book but not yet reflected by the bank (issued cheques not presented, deposited cheques not yet credited) are timing differences and need no cash book entry. Bank charges are known only from the bank statement, so the cash book must be updated by crediting the bank column.

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