E Reconciliations

Which item is a timing difference between the bank statement and the cash book?

• 1 A direct debit shown on the statement
• 2 A cheque issued but not yet presented
• 3 Bank charges shown on the statement
• 4 A dishonoured cheque

The bank statement shows $6,400. There are unpresented cheques of $900 and lodgements of $500 not yet credited by the bank. What is the correct bank balance?

• 1 $7,800
• 2 $6,800
• 3 $5,000
• 4 $6,000

The bank statement shows bank charges not yet recorded in the cash book. What entry is needed?

• 1 No entry is needed
• 2 Debit bank charges expense, credit bank
• 3 Debit payables, credit bank
• 4 Debit bank, credit bank charges expense

A customer's cheque is returned by the bank unpaid. What entry is needed?

• 1 Debit receivables, credit revenue
• 2 Debit revenue, credit bank
• 3 Debit receivables, credit bank
• 4 Debit bank, credit receivables

What is the main purpose of reconciling the payables ledger to a supplier's statement?

• 1 To calculate the discount received
• 2 To check that the entity's records agree with what the supplier says is owed
• 3 To increase the amount owed
• 4 To value inventories

Which bank balance is reported in the statement of financial position?

• 1 The balance before adjustments
• 2 The adjusted cash book balance
• 3 The balance on the bank statement
• 4 The average of the two