Accounting Multiple Choice Question – 26 March 2020

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

Bank charges should initially be recorded . . . . . .?

Select ONE answer:

  1. by debiting the bank charges account and crediting the bank account.
  2. by debiting the bank account and crediting the bank charges account.
  3. in the Cash Book (or Cheque Payments Book).
  4. by debiting the suspense account and crediting the bank account.

 

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 3

  1. Not correct – Bank charges. like all other transactions and events, should initially be recorded in a book of original entry and subsequently recorded in the general (nominal) ledger.
  2. Not correct – Bank charges. like all other transactions and events, should initially be recorded in a book of original entry and subsequently recorded in the general (nominal) ledger.
  3. Correct – Bank charges result in the bank balance being reduced. All reductions in the bank balance are initially recorded in the Cash Book (or cheque payments book) and subsequently posted to the nominal (general) ledger.
  4. Not correct – No transaction is ever initially recorded in the suspense account. A suspense account arises only after all transactions have been recorded in the nominal (general) ledger. either directly. or via the books of original entry, and a trial balance prepared which is found to be out of balance.

 

 

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