A bank reconciliation statement is prepared after all known bank charges and direct receipts have been entered in the cash book. Which item would still normally appear as a reconciliation item?
Correct answer: C. A cheque issued but not yet presented
- A. A standing order already entered in the cash book
- B. A bank charge already entered in the cash book
- C. A cheque issued but not yet presented
- D. A direct receipt already entered in the cash book
Explanation
An issued cheque not yet presented creates a timing difference between the cash book and bank statement. The other items have already been entered in the cash book and therefore do not remain as reconciling items merely for that reason.
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About Bank Reconciliation and Control Accounts
Bank reconciliation explains differences between the cash book and bank statement through unpresented cheques, outstanding deposits, bank charges, direct payments, credited amounts and recording errors. Control accounts summarise receivables and payables ledgers, and their balances are reconciled with individual accounts to locate discrepancies.
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