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
CIMA Forums
Dishonoured cheques
4y ago#1Without 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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