A company's cash book shows a debit balance of $4,500. The bank statement shows a credit balance of $5,200. The difference is due to unpresented cheques of $1,200 and a bank charge of $50 not yet recorded in the cash book. What is the correct cash balance to be reported in the statement of financial position?

Answer options:

$4,000

$4,450

$5,200

How to approach this question

The balance reported in the financial statements is always the adjusted cash book balance.

Full Answer

C.$4,450✓ Correct

The figure reported in the financial statements is the adjusted cash book balance. The original cash book balance is $4,500. The bank charge of $50 must be deducted as it hasn't been recorded yet. Adjusted cash book = $4,500 - $50 = $4,450. (Unpresented cheques are a reconciling item against the bank statement).

Common mistakes

Adjusting the cash book for unpresented cheques.

Question 18 All questions Question 20

Practice the full ACCA FA — Financial Accounting Practice Exam 2

65 questions · hints · full answers · grading

More questions from this exam

Q01BioGenix Ltd, a biotech startup, is deciding whether to disclose a highly uncertain contingent li...Easy Q02Which of the following bodies is primarily responsible for issuing International Financial Report...Easy Q03Which of the following are the primary responsibilities of the directors of a limited liability c...Medium Q04Titanium Forge Co, a heavy manufacturing firm, recently incurred the following costs: 1. $50,000 ...Medium Q05A company makes a 1 for 4 bonus issue of shares. The nominal value of the shares is $1. The compa...Medium

View all 65 questions →