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Zorluk: ZorPreparation of Adjusted Cash Book

On 31st December 2025, the Cash Book of Folake Traders showed an overdraft balance of ₦14,200\text{₦}14,200. On comparing the Cash Book with the Bank Statement, the following details were discovered:

- Direct credit transfer by a customer: ₦6,500\text{₦}6,500
- Standing order payment for insurance: ₦2,800\text{₦}2,800
- Bank charges debited by the bank: ₦1,500\text{₦}1,500
- Customer's cheque dishonoured by the bank: ₦4,000\text{₦}4,000
- Unpresented cheques: ₦8,200\text{₦}8,200
- Uncredited lodgements: ₦5,400\text{₦}5,400

What is the correct balance to be shown in the Adjusted Cash Book?

  1. Overdraft of ₦16,000Cevap
  2. B
    Overdraft of ₦13,200
  3. C
    Overdraft of ₦21,000
  4. D
    Favourable balance of ��12,400

Cevap

Overdraft of ₦16,000
The Adjusted Cash Book only incorporates items recorded by the bank but omitted from the cash book. Starting with an overdraft balance of −₦14,200-\text{₦}14,200, adding the direct customer deposit (+₦6,500+\text{₦}6,500) and deducting standing orders (−₦2,800-\text{₦}2,800), bank charges (−₦1,500-\text{₦}1,500), and dishonoured cheques (−₦4,000-\text{₦}4,000) results in an adjusted credit balance (overdraft) of ₦16,000\text{₦}16,000. Unpresented cheques and uncredited lodgements are timing differences and are excluded from the cash book adjustment.

Adım Adım Çözüm

1
Identify starting balance condition
Cash Book Overdraft balance = −₦14,200-\text{₦}14,200 (Credit balance)
An overdraft represents a credit (negative) balance in the cash book.
2
Classify items between Adjusted Cash Book and Bank Reconciliation Statement
Adjusted Cash Book items: Direct credit (+₦6,500+\text{₦}6,500), Standing order (−₦2,800-\text{₦}2,800), Bank charges (−₦1,500-\text{₦}1,500), Dishonoured cheque (−₦4,000-\text{₦}4,000). BRS items: Unpresented cheques and Uncredited lodgements.
Only items unrecorded in the cash book or actual cash book errors belong in the Adjusted Cash Book. Timing differences (unpresented/uncredited cheques) belong only in the BRS.
3
Calculate the updated cash book balance
−₦14,200+₦6,500−₦2,800−₦1,500−₦4,000=−₦16,000-\text{₦}14,200 + \text{₦}6,500 - \text{₦}2,800 - \text{₦}1,500 - \text{₦}4,000 = -\text{₦}16,000
Receipts increase cash balance (reduce overdraft) while payments and dishonoured deposits increase overdraft.

Anahtar Kavram

Adjusted Cash Book preparation under Bank Overdraft conditions
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Konular

Preparation of Adjusted Cash Book

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