Accounting Multiple Choice Question – 19 February 2020

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Accounting

The total of cheques issued during the last six months which at the date on which a bank reconciliation statement is prepared, have not been shown on the bank statement . . .

Select ONE answer:

  1. should be included in the bank reconciliation statement.
  2. should be shown in the balance sheet under the heading ‘accruals‘.
  3. should be cancelled.
  4. are ‘stale’ cheques.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

  1. Correct – These cheques (outstanding cheques) must be included in the bank reconciliation statement because they will have been recorded in the accounting records but have not been recorded in the bank statement. They therefore give rise to a difference between the two balances.
  2. Not correct – Accruals are amounts unpaid at the balance sheet date – not amounts that have been paid by cheque.
  3. Not correct – Cheques should be cancelled by the drawer (the person who wrote them) when he / she does not wish them to be cashed.
  4. Not correct – A ‘stale’ cheque is one which is dated more than six months ago and therefore cannot be cashed.

 

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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

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