Which item is normally entered in an adjusted cash book before preparing a bank reconciliation statement?
Correct answer: C. A bank service charge omitted from the cash book
- A. A cheque issued but not yet presented
- B. A deposit recorded but not yet credited
- C. A bank service charge omitted from the cash book
- D. An error made by the bank in its statement
Explanation
Bank service charges are known from the bank statement but are initially missing from the cash book, so they are entered in the adjusted cash book. Timing differences and bank errors remain reconciliation items until resolved.
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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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