E Reconciliations

Written by Fahad Mirza (ACCA)

ACCA · Financial Accounting · 6 questions

Name: ____________________ Date: ____________

Which item is a timing difference between the bank statement and the cash book?
- A A direct debit shown on the statement
- B A cheque issued but not yet presented
- C Bank charges shown on the statement
- D 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?
- A $7,800
- B $6,800
- C $5,000
- D $6,000
The bank statement shows bank charges not yet recorded in the cash book. What entry is needed?
- A No entry is needed
- B Debit bank charges expense, credit bank
- C Debit payables, credit bank
- D Debit bank, credit bank charges expense
A customer's cheque is returned by the bank unpaid. What entry is needed?
- A Debit receivables, credit revenue
- B Debit revenue, credit bank
- C Debit receivables, credit bank
- D Debit bank, credit receivables
What is the main purpose of reconciling the payables ledger to a supplier's statement?
- A To calculate the discount received
- B To check that the entity's records agree with what the supplier says is owed
- C To increase the amount owed
- D To value inventories
Which bank balance is reported in the statement of financial position?
- A The balance before adjustments
- B The adjusted cash book balance
- C The balance on the bank statement
- D The average of the two

Answer key

1. B, 2. D, 3. B, 4. C, 5. B, 6. B

Unpresented cheques are in the ledger but not yet on the statement. The others need an entry in the ledger.
Adjusted balance = $6,400 - $900 + $500 = $6,000.
The charge is an expense and reduces the bank balance.
The receipt is reversed and the customer owes the money again.
Differences point to timing items or errors that need investigating.
The ledger balance after correcting for unrecorded items is reported.