Bank reconciliation: Practice Questions

When preparing a bank reconciliation, which of the following items requires an entry in the cash book to update its balance?

A business's cash book balance (bank column) showed a debit balance of \(\$8,500\). The bank statement showed a credit balance of \(\$7,800\). Comparing the two, the following discrepancies were found: unpresented cheques totalling \(\$1,500\), and a direct debit of \(\$400\) not yet recorded in the cash book. A bank error incorrectly debited a cheque of \(\$200\) to the business's account.

What is the adjusted cash book balance?

At the end of the month, a business cash book showed a credit balance of \(\$1,200\). The following discrepancies were found:
1. Bank charges of \(\$50\) were not recorded in the cash book.
2. Unpresented cheques totalled \(\$400\).
3. Uncredited deposits totalled \(\$600\).
What was the balance shown on the bank statement?

A business's cash book showed an overdrawn bank balance of \(\$2,150\) on 30 June. Comparison with the bank statement revealed the following:
1. Bank charges of \(\$45\) and a standing order for insurance of \(\$120\) were not recorded in the cash book.
2. A cheque for \(\$300\) received from a customer and deposited had been dishonoured by the bank, but no entry had been made in the cash book.
3. Unpresented cheques amounted to \(\$850\).
4. Uncredited deposits totalled \(\$1,100\).
5. The bank had incorrectly debited the business account with a cheque for \(\$150\) belonging to another customer.

Calculate the balance that appeared on the original bank statement on 30 June.

A business's cash book balance showed a debit of \(\$8,500\) on 31 March 2024. The bank statement showed a credit balance of \(\$7,800\) on the same date. Upon comparing the two, the following discrepancies were identified:
1. Cheques issued but not yet presented: \(\$1,200\)
2. Deposits made but not yet credited by the bank: \(\$900\)
3. Bank charges not yet entered in the cash book: \(\$50\)
4. A direct debit for insurance, not yet recorded: \(\$150\)
5. A cheque received from a customer, dishonoured by the bank, not yet entered in the cash book: \(\$300\)
6. An error by the bank where a deposit of \(\$200\) belonging to another customer was credited to the business's account.

Calculate the adjusted cash book balance and the balance as per bank reconciliation statement.

On 31 October 2023, the bank column of a trader's cash book showed a debit balance of \(\$2,450\). On the same date, the bank statement showed a different balance. Upon comparison, the following discrepancies were found:

1. The cash book was undercast by \(\$100\) on the debit side.
2. A standing order for insurance, \(\$120\), had been paid by the bank but not recorded in the cash book.
3. A cheque received from a customer, \(\$450\), was returned by the bank marked 'refer to drawer' (dishonoured). No entry had been made in the cash book for this return.
4. Bank charges of \(\$35\) appeared on the bank statement but not in the cash book.
5. Cheques issued to suppliers totaling \(\$840\) had not yet been presented to the bank.
6. Cash and cheques totaling \(\$1,120\) were paid into the bank on 31 October but did not appear on the bank statement until 2 November.
7. The bank had incorrectly debited the trader's account with a cheque for \(\$200\) drawn by another customer.

(a) Calculate the updated cash book balance on 31 October 2023.
(b) Prepare a bank reconciliation statement to determine the balance shown on the bank statement on 31 October 2023.