ExpertMedium2 marksMultiple Choice
ACCA · Question 19 · Preparing a trial balance
A company's cash book shows a debit balance of $4,500. The bank statement shows a credit balance of $5,200. The difference is due to unpresented cheques of $1,200 and a bank charge of $50 not yet recorded in the cash book. What is the correct cash balance to be reported in the statement of financial position?
A company's cash book shows a debit balance of $4,500. The bank statement shows a credit balance of $5,200. The difference is due to unpresented cheques of $1,200 and a bank charge of $50 not yet recorded in the cash book. What is the correct cash balance to be reported in the statement of financial position?
Answer options:
A.
$4,000
B.
$4,450
C.
$4,450
D.
$5,200
How to approach this question
The balance reported in the financial statements is always the adjusted cash book balance.
Full Answer
C.$4,450✓ Correct
The figure reported in the financial statements is the adjusted cash book balance. The original cash book balance is $4,500. The bank charge of $50 must be deducted as it hasn't been recorded yet. Adjusted cash book = $4,500 - $50 = $4,450. (Unpresented cheques are a reconciling item against the bank statement).
Common mistakes
Adjusting the cash book for unpresented cheques.
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