Question 1

Section A

At 30 November, a company's cash book showed a debit balance of $4,200. The bank statement showed a credit balance of $5,100. The following differences were identified:
- Unpresented cheques: $1,500
- Lodgements in transit (uncleared deposits): $800
- Bank charges not entered in the cash book: $200

What is the correct cash book balance to be reported in the statement of financial position? (Enter the number only)

Accepted Answer

Adjust the cash book balance for items on the bank statement not yet in the cash book (bank charges). Alternatively, adjust the bank statement balance for timing differences (unpresented cheques, lodgements). Both should arrive at the same figure.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Adjusting the cash book for unpresented cheques or lodgements, which are timing differences that clear themselves.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA FA — Financial Accounting Practice Exam 5

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