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Dishonoured cheques

Forums › CIMA Forums › Dishonoured cheques

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by AvatarJohn Moffat.
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  • November 28, 2020 at 9:19 pm #596950
    AvatarVal2020
    Participant
    • Topics: 2
    • Replies: 1
    • ☆

    Hi,

    I am a bit confused about recon. and adjustments made with regards to dishonoured cheques…Why the cash book is is deducted by the amount in this case; cash balance is £2490 and the dishonoured cheque £140. New revised balance is £2350. Which makes sense to me. However in other example…the dishonoured cheque has been added to cash book balance, the example is as follows;
    Cash book balance shows a bank balance of £565, a cheque for £92 from a customer has been dishonoured. the correct answer as per the Kaplan book is £657. Do you know why?

    Many thanks
    Val

    December 30, 2021 at 8:21 am #645046
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54836
    • ☆☆☆☆☆

    Without seeing the question, I would guess that the bank balance is a credit balance (i.e. 565 overdrawn). In which case when the cheque is dishonoured (and so not cash will have been received) the overdraft will be bigger and will be 565 + 92.

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