Mauritz Co is preparing a bank reconciliation. The bank balance in the general ledger is $540 credit. There are two items that have not been dealt with.
(1) A cheque for $620 was sent to a supplier but is not yet showing on the bank statement.
(2) A bank charges of $28 was charged by the the bank , but was not recorded Mauritz Co.
What is the closing balance on Mauritz Co's bank statement?
A $1, 132 overdrawn
B $1, 188 overdrawn
C $52 cash at bank ( correct ans )
D $108 cash at bank.
I don't understand why C is the correct ans and not B.
My working
540 +28= $568 overdrawn for Cash book
568 +620= 1,188 overdrawn
Many thanks
Ask the Tutor ACCA FA
Bank Reconciliation
7y ago#1The correct cash book balance is indeed 568 overdrawn.
However since the 620 cheque paid does not yet appear on the bank statement, the balance on the bank statement must be 620 more. Having 620 more than an overdraft of 568 means that the bank must at the moment be showing a balance of 52 cash at bank.
(Once the cheque appears, the balance will then go overdrawn and be 568 overdrawn).
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