A business lodged a customer's cheque into its bank account near the end of the month. The transaction was recorded in the Cash Book immediately, but the bank had not credited the account as of the Bank Statement date. How does this uncredited deposit affect the Cash Book balance relative to the Bank Statement balance prior to reconciliation?
- The Cash Book balance is greater than the Bank Statement balance.Cevap
- BThe Cash Book balance is less than the Bank Statement balance.
- CThe Cash Book balance remains equal to the Bank Statement balance.
- DThe Bank Statement balance becomes overdrawn by the amount of the cheque.
Cevap
The Cash Book balance is greater than the Bank Statement balance.
When a cheque received is lodged in the bank, the debit side of the Cash Book is credited/debited (debited to increase asset balance) immediately by the business. Since the bank has not cleared or credited the amount by the statement date, the bank statement balance remains lower. Therefore, prior to bank reconciliation, the Cash Book balance is greater than the Bank Statement balance.
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Anahtar Kavram
Impact of uncredited deposits (lodgements in transit) on bank reconciliation