Bank Reconciliations

Hi John. I have a couple of questions in relation to bank reconciliations – maybe it’s the wording of the questions from the exam kit I’m working off that’s confusing me but if you could take a look at the below that would be very much appreciated. I might have a couple of more examples later but maybe if I understand the below then that will help me with the others. Apologies if the formatting is a bit messy.

Your firm’s cash book at 30 April 20X8 showed a balance at the bank of $2,490. Comparison with the bank statement at the same date revealed the following differences:

Unpresented cheques: 840
Bank charges not in cash book: 50
Receipts not yet credited by the bank: 470
Dishonoured cheque not in cash book: 140

What was the correct bank balance at 30 April 20X8?

A: 1,460
B: 2,300 (Correct answer)
C: 2,580
D: 3,140

If the unpresented cheques have not been cleared yet, would that not mean that the bank balance is 840 greater? The same for the receipts, wouldn’t this reduce the bank balance by 470?

Or am I being thrown off by the wording of the question “correct bank balance” – are they referring to the cash balance or the balance showing on the bank statement (because I’m reading it as the latter)?

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A bank reconciliation statement for Dallas at 30 June 20X5 is being prepared. The following information is available:

1. Bank charges of $2,340 have not been entered in the cash book.
2. The bank statement shows a balance of $200 Dr.
3. Unpresented cheques amount to $1,250.
4. A direct debit of $250 has not been recorded in the ledger accounts.
5. A bank error has resulted in a cheque for $97 being debited to Dallas’ account instead of Dynasty’s account.
6. Cheques received but not yet banked amounted to $890.

The final balance in the cash book after all necessary adjustments should be:

A: $463 Dr
B: $463 Cr
C: $63 Cr
D: $63 Dr

So my take on the above is this: The balance of $200 (point 2) has already taken into account the bank charges (point 1) and the direct debit (point 4). I understand the unpresented cheques (point 3) and cheques received (point 6).

However, would the balance per the bank statement not have already taken into account the bank error (point 5)? I would have assumed that the balance of $200 included this.