A. uncredited cheques
B. direct payments by bank
C. bank charged
D. unpresented cheques
Correct Answer:
Option D – unpresented cheques
Explanation
we will look at the way in which a business deals with any differences between the balance of the bank account in the cash book and the closing balance of the bank account shown by the bank statement for the same period.
These differences are explained by a document known as a bank reconciliation statement: which lists
- items which are in the cash book but not on the bank statement
- items which are on the bank statement but not in the cash book
This process is an important one: it enables the business to update its cash book and also helps to prove the accuracy of the bookkeeping of the business and the bank.
1 Prepare a Bank Reconciliation Statement
(a) Compare transactions that appear on both Cash Book and Bank Statement
(b) Update Cash Book from details of transactions appearing on Bank Statement
(c) Balance the bank columns of the Cash Book to calculate the revised balance
2 Complete a Bank Reconciliation Statement
(a) Enter the correct date of the statement
(b) Enter the balance at the bank as per the Cash Book
(c) Enter details of unpresented cheques
(d) Enter sub-total on reconciliation statement
(e) Enter details of bank lodgements
(f) Calculate balance as per Bank Statement
