Chapter 15 Bank reconciliation statement

A business receives a bank statement and updates its cash book. Which item will increase the bank balance in the cash book?

• bank charges

• credit transfers received

• interest charges

• standing orders paid

A bank reconciliation statement is

• drawn up by the bank to ensure there is no fraud.

• drawn up by the company to verify the cash book balance against the bank statement balance.

• sent by the bank every quarter.

• sent by the bank when the account is overdrawn.

The balance of cash at bank shown in the cash book is $1200. The bank statement balance shown $1440.

Which can explain the difference?

• payment to a supplier, $120, entered wrong side of the cash book

• bank charges, $240, not in the cash book

• cheques to suppliers, $240, not yet presented to the bank

• receipts from customers, $240, banked but not yet entered in the bank statement

A bank reconciliation statement is . . .

• part of the double-entry accounting records.

• not part of the double-entry accounting records.

• prepared by a firm and then sent to its bank.

• posted to the nominal (general) ledger.

A bank statement showed a credit balance of $300 on 31 March. On that date unpresented cheques amounted to $120.

What was the cash book balance on 31 March?

• $180 credit

• $180 debit

• $420 credit

• $420 debit

A bank statement balance and a cash book balance do not agree.

Which items arise from timing differences?

1 bank charges

2 bank errors

3 uncredited deposits

4 unpresented cheques

• 1 and 2 only

• 1, 2, 3 and 4

• 2, 3 and 4 only

• 3 and 4 only

Amber updated her cash book after receiving her bank statement. The updated cash book balance was an overdraft of $250.

The bank statement did not include cheques not presented, $96, and amounts not credited, $183.

What was the balance shown on the bank statement?

• $163 credit

• $163 debit

• $337 credit

• $337 debit

A cash book shows a debit balance on the bank account of $1200. There are unpresented cheques totalling $420.

Which balance appears on the bank statement?

• $780 credit

• $780 debit

• $1620 credit

• $1620 debit

A trader compared his cash book (bank column), which had a debit balance of $70, with his bank statement. He found that bank charges, $10, had not been recorded in his books, and that a cheque for $18 which he had issued had not been presented.

What was the balance on his bank statement?

• $62 credit

• $62 debit

• $78 credit

• $78 debit

Jack’s bank statement showed a credit balance of $600 on 30 June. It contained bank charges, $20, which did not appear in the cash book. Cheques, $150, issued by Jack did not appear on the bank statement.

Which value for bank appeared in Jack’s statement of financial position on 30 June?

• $450 current asset

• $580 current asset

• $620 current liability

• $750 current liability