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An entity has prepared its bank reconciliation at 31 March 20X4 taking the following information into account:
Outstanding lodgements $ 5,000
Unpresented cheques $ 2,800
Bank charges included in the bank statement but not recorded in the cash book were $125.
The adjusted cash book balance per the bank reconciliation was a debit balance of $1,060.
What was the balance as shown on the bank statement at 31 March 20X4?
“The adjusted cash book balance per the bank reconciliation was a debit balance of $1,060”.
Does the above statement mean that $1060 was the carried forward balance in cash book after making all adjustment in cash book by matching it with Bank Statement? Subsequently the same amount will reflect as credit amount in the Bank statement?
I do not know which exam kit you are referring to, so I cannot check the actual question.
However the wording as you have typed it suggests that $1,060 is what results at the end of the bank reconciliation statement which is the correct balance in the cash book (after making whatever corrections are needed in the cash book), and that since it is a debit in the cash book it means a credit on the bank statement.
Does the answer in the exam kit not make it clear?
it’s from kaplan exam kit. The answer just shows the calculation.
Your explanation has clarified my doubt. Thank you.
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