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Difficulty: MediumPreparation of Bank Reconciliation Statement

The adjusted cash book of Folake Trading Enterprise showed an overdraft balance of NGN 14,800\text{NGN } 14,800 as at 31st July 2026. On comparing the adjusted cash book with the bank statement, the following reconciling items were identified:

- Cheques issued to suppliers but not yet presented for payment: NGN 6,200\text{NGN } 6,200
- Cheques paid into the bank but not yet credited by the bank: NGN 4,500\text{NGN } 4,500

What is the balance as per the bank statement as at 31st July 2026?

  1. A
    Overdraft of NGN 16,500\text{NGN } 16,500
  2. Overdraft of NGN 13,100\text{NGN } 13,100Answer
  3. C
    Overdraft of NGN 4,100\text{NGN } 4,100
  4. D
    Overdraft of NGN 25,500\text{NGN } 25,500

Answer

Overdraft of NGN 13,100\text{NGN } 13,100
Starting with an adjusted cash book overdraft of −NGN 14,800-\text{NGN } 14,800, unpresented cheques of NGN 6,200\text{NGN } 6,200 are added (reducing the overdraft to −NGN 8,600-\text{NGN } 8,600) and uncredited lodgements of NGN 4,500\text{NGN } 4,500 are deducted, yielding a final bank statement overdraft balance of NGN 13,100\text{NGN } 13,100.

Step-by-Step Solution

1
Identify the starting balance and nature of the cash book balance
Adjusted Cash Book Balance = −NGN 14,800-\text{NGN } 14,800 (overdraft)
An overdraft in the cash book represents a negative/credit balance.
2
Add unpresented cheques to the cash book balance
−NGN 14,800+NGN 6,200=−NGN 8,600-\text{NGN } 14,800 + \text{NGN } 6,200 = -\text{NGN } 8,600
Unpresented cheques have been deducted in the cash book but not yet by the bank, so they are added back when moving from cash book to bank statement balance.
3
Deduct uncredited cheques from the result
−NGN 8,600−NGN 4,500=−NGN 13,100-\text{NGN } 8,600 - \text{NGN } 4,500 = -\text{NGN } 13,100
Uncredited cheques have been added in the cash book but not yet by the bank, so they are deducted when moving from cash book to bank statement balance.

Key Concept

Reconciliation from Adjusted Cash Book to Bank Statement
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Topics

Preparation of Bank Reconciliation Statement

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