Bank Reconciliation Quiz

 #Accounting Quiz – Bank Reconciliation The Bank Column of Cash Book is showing an OVERDRAFT of $1000. What is the…

#Accounting Quiz – Bank Reconciliation
The Bank Column of Cash Book is showing an OVERDRAFT of $1000. What is the Balance on the Bank Statement if it does not have:
Unpresented Cheques $200
Uncredited Deposits $100
A) ($900)
B) $1100
C) ($1100)

Bank Reconciliation Quiz – Explained

Balance as per Cash Book             ($1000)

Add: Unpresented Cheques            $200

Less: Uncredited Cheques             ($100)

Balance as per Bank Statement    ($900)

So, as per above bank reconciliation working the correct answer is ($900). The cash book shows an amount of ($1000) as bank balance whereas actual bank statement is showing a ($900) balance.

Please note that the amount is shown in brackets, that means a negative balance or an overdraft. The company may have been utilising the facility of bank overdraft, that means a withdrawal of amount to a certain limit even when you have no amount left in the bank.  You can now take it as the Cash book is showing a bank overdraft of $900 whereas in bank statement the overdraft was stated as $900. The working of how the bank statement balance has arrived is shown above in reconciliation.

Unpresented cheques, these are the cheques that the business has given to its creditors but they have not yet presented these in the bank. You can also say this as, the business has credited the cheque after giving them to the parties in its cash book (bank column) whereas since it is actually not withdrawn from the bank, it is said to be unpresented cheque.

Uncredited cheques are those cheques that are not yet cleared by the bank. You can also say this as the business has received the cheque and debited it into its cash book (bank column or ledger) and also deposited it into the bank, but it is still in process at bank’s end and not yet cleared or not yet recorded (credited) by bank in its bank statement.

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