Month: April 2024

Which TWO of the following statements about bank reconciliations are correct?

A  In preparing a bank reconciliation, unpresented cheques must be deducted from a balance of cash at bank shown in the bank statement.

B  A cheque from a customer paid into the bank but dishonoured must be corrected by making a debit entry in the cash book.

C  An error by the bank must be corrected by an entry in the cash book.

D  An overdraft is a debit balance in the bank statement.

E  Bank charges that only appear on the bank statement must be debited in the cash book.

Select ONE answer:

1. A&B
2. A&C
3. A&D
4. A&E

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
2. Not correct
3. Correct – A&D – Note that bank charges in the bank statement would be credited to the cash book, not debited
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The following information relates to a bank reconciliation.

The balance in the cash book before taking the items below into account was £8,970 overdrawn.

• Bank charges of £550 on the bank statement have not been entered in the cash book.
• The bank has credited the account in error with £425 which belongs to another customer.
• Cheque payments totalling £3,275 have been entered in the cash book but have not been presented for payment.
• Cheques totalling £5,380 have been correctly entered on the debit side of the cash book but have not been paid in at the bank.

What was the overdrawn balance as shown by the bank statement?

Select ONE answer:

1. £6,990
2. £10,650
3. £11,200
4. £11,625

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
2. Not correct
3. Correct – Cash book balance b/f £(8,970) – Bank charges  £(550) = Corrected cash book £(9,520) + Error £425 + Unpresented cheques £3,275 – Uncredited lodgements £(5,380) = Bank statement balance £(11,200)
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Where a transaction is entered into the correct ledger accounts, but the wrong amount is used, the error is known as an error of?

Select ONE answer:

1. Omission
2. Original entry
3. Commission
4. Principle

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 2

1. Notcorrect
2. Correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.