ExpertMedium2 marksShort Answer
ACCA · Question 19 · Bank Reconciliations
A company's cash book shows a debit balance of $12,400. The bank statement shows a credit balance of $11,900. The difference is due to unpresented cheques of $3,200, outstanding lodgements of $2,500, and bank charges of $200 not yet recorded in the cash book. What is the revised cash book balance to be reported in the statement of financial position? (Enter the number only)
A company's cash book shows a debit balance of $12,400. The bank statement shows a credit balance of $11,900. The difference is due to unpresented cheques of $3,200, outstanding lodgements of $2,500, and bank charges of $200 not yet recorded in the cash book. What is the revised cash book balance to be reported in the statement of financial position? (Enter the number only)
How to approach this question
Update the cash book balance with items it is missing (bank charges). Do not adjust the cash book for timing differences (unpresented cheques, outstanding lodgements).
Full Answer
To find the revised cash book balance, we only adjust the original cash book balance for items it is missing. Original cash book balance = $12,400 (Debit/Positive). Less: Bank charges not recorded = $200. Revised cash book balance = $12,200. (Check via bank statement: Bank statement balance $11,900 + Outstanding lodgements $2,500 - Unpresented cheques $3,200 = $12,200).
Common mistakes
Adjusting the cash book for unpresented cheques and outstanding lodgements, which belong on the bank reconciliation statement, not in the cash book.
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