A cheque payment is entered twice in the bank column of the cash book, but the bank records the payment only once. What correction is required?
Correct answer: B. Reduce the cash book balance by the cheque amount
- A. Increase the cash book balance by the cheque amount
- B. Reduce the cash book balance by the cheque amount
- C. Increase the bank statement balance by the cheque amount
- D. Record the cheque as a deposit in transit
Explanation
The duplicate entry has reduced the cash book balance twice, although the bank has reduced it only once. The cash book must therefore be increased by removing the second payment entry, not reduced further.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
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.
Practise Bank Reconciliation and Control Accounts
34 free Bank Reconciliation and Control Accounts MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Accounting questions like this
Accounting is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Bank Reconciliation and Control Accounts questions
The cash book shows a favourable bank balance of Rs. 31,500. Bank charges of Rs. 1,200 and a direct credit of Rs. 4,000 are not yet recorded in the cash book. Unpresented cheques are Rs. 6,500 and deposits in transit are Rs. 3,000. What balance should appear on the bank statement?
A sales ledger control account has a debit balance. What does this balance normally represent?
A control account is used in a general ledger while detailed customer or supplier accounts are kept in subsidiary ledgers. Which feature is a major advantage of this arrangement?
A purchases ledger control account has a debit balance at the end of an accounting period. What does this balance normally indicate?
Which transaction is normally excluded from a sales ledger control account because it does not involve credit customers?
Which source normally provides the total of credit purchases posted to the purchases ledger control account?