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Hallo,
I have the following example and trying to understand the answer:
The example says:
Your cash book at 31 December 20X3 shows a bank balance of $565 overdrawn. On
comparing this with your bank statement at the same date, you discover that:
– a cheque for $57 drawn by you on 29 December 20X3 has not yet been presented
for payment;
– a cheque for $92 from a customer, which was paid into the bank on 24 December
20X3, has been dishonoured on 31 December 20X3.
The correct bank balance to be shown in the statement of fi nancial position at 31
December 20X3 is:Answer: $565 overdrawn dishonoured + cheque $92 = $657 overdrawn
The cash book balance needs adjusting for the dishonoured cheque, and the bank
balance needs adjusting for the unpresented cheque.
My Q: with all that I have learnt about this till now, I dont’ understand why the $57 is not included in the answer,
For me the answer should be:
-565 + 57 – 92= 600, why do they skip the 57?
Thank you!
An unpresented cheque is a payment that has been correctly entered in the cash account but has not yet appeared on the bank statement.
The question gives you the balance on the cash account and required you to correct it. Since the 57 will have been correctly entered, there is no need to make any correction for it in the cash account.
(It will be a reason for the bank statement showing a different balance, but that is not relevant in this question).Hallo,
Am I correct, when we solve for the bank balance in the cash book, it will be as they say -565-92= -657, and the other balance they are not asking for as you say is not relevant will nevertheless be -565+57= -508, this will be the bank balance corrected for unpresented cheque, and if they want to have the two balances equal then we can say that -565 + 57 – 92= 600, is this correct?
Thank you!
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