I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

EXAM FOCUS POINT 

You are highly likely to have a bank reconciliation question in your exam. You may have to adjust the 

cash book, the bank balance or both. Make sure you pay particular attention to the next section.

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CHAPTER 15  

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  BANK RECONCILIATIONS 

 

267 

QUESTION 

Reconciliation

 

On 31 January 20X8 a company's cash book showed a credit balance of $150 on its current account 

which did not agree with the bank statement balance. In performing the reconciliation the following 

points came to light.  

 

$   

Not recorded in the cash book  

 

Bank charges 

36 

Transfer from deposit account to current account 

500 

 

 

Not recorded on the bank statement 

 

Unpresented cheques 

116 

Outstanding lodgements 

630 

It was also discovered that the bank had debited the company's account with a cheque for $400 in error. 

What was the original balance on the bank statement? 

ANSWER 

 

CASH ACCOUNT 

 

$   

 

$   

  

Balance 

b/d 

150 

Transfer from deposit a/c 

500 

Charges 

36 

 

 

       Balance 

c/d 

 

314 

 

 

500 

 

 

500 

 

$   

Balance per corrected cash book 

314 

Add unpresented cheques  

116 

Less outstanding lodgements 

(630) 

Less error by bank* 

 

(400) 

Balance per bank statement 

 

(600) 

* Note that, on the bank statement, a debit is a payment out of the account. 

 

 

QUESTION 

Bank statement

 

A company's bank statement shows $715 direct debits and $353 investment income not recorded in the 

cash book. The bank statement does not show a customer's cheque for $875 entered in the cash book 

on the last day of the accounting period. If the cash book shows a credit balance of $610, what balance 

appears on the bank statement?  

A $1,847 

debit 

B $1,847 

credit 

C $972 

credit 

D $972 

debit 

 EXAM FOCUS POINT 

You may well be asked to reconstruct opening figures in the exam. If so, then you may need to reverse 

the usual workings, as illustrated in the example above.

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