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Jonas is preparing his bank reconciliation. The balance on the bank statement is $653 debit. There are uncleared lodgements of $268 and unpresented cheques of $613. The bank has also credited his account with $25 in error.
What is the cash book balance?
$653 Cr
$1,023 Cr
$998 Dr
$283 Dr
Correct Answer
$1,023 Crhowever i did not get any answer given from the mcq. what i did was less $ 263 and add $ 613 and less $ 25 because its overdraft dr.
Because the bank statement has a debit balance, it means that they are showing an overdraft.
Therefore you need to add the unpresented cheques, subtract the uncleared lodgements, and add the $25.
This gives an overdraft of 1,023, which will therefore be a credit balance in the cash account.
If the bank statement is credited it means cash is received into the bank. If cash is received into the bank then the overdraft will be lower.
However the question says that it was credited in error and so they should not have credited and reduced the overdraft. Therefore to correct it we need to increase the overdraft.
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