Adjusting Cash Book for Errors and Unrecorded Bank Items Steps:

• Start with the given debit balance in the bank column: $1090.
• Correct the recording error in purchases payment: actual $980 but recorded$990, so add back the $10 overstatement to the bank balance ($1090 + 1100).
• Add the unrecorded interest received from the bank statement: $1100 +$120 = $1220.
• Subtract the unrecorded bank charges from the bank statement: $1220 -$76 = $1094.

Why D is correct:

• The adjusted cash book balance uses the formula: initial balance + error correction + credits from statement - debits from statement, yielding $1094 as the true debit balance.

Why the others are wrong:

• A ignores interest received and error correction, only subtracting charges ($1090 -$76 + $40? incorrect net).
• B subtracts charges but mishandles interest and error ($1090 -$76 + $120 -$68? wrong signs).
• C forgets error correction and underadds interest net ($1090 +$120 - $76 -$69? miscalculation).

Final answer: D