Bank Reconciliation: Adjusting for Unrecorded Items

Steps:

• Note the bank statement credit balance of $940, which includes all bank-recorded transactions.
• Identify unrecorded credits in the cash book: bank interest $70 and credit transfer$280, totaling $350.
• These credits increase the bank balance relative to the cash book.
• Cash book debit balance = bank balance - unrecorded credits = $940 -$350 = $590.

Not enough information: The calculated cash book balance ($590) does not match any option, indicating missing details (e.g., additional unrecorded items or errors in figures).

Why A is correct: Insufficient data prevents confirmation, but assuming a possible figure error (e.g., bank balance $640),$640 - $350 =$290 aligns with standard reconciliation subtracting unrecorded credits from bank balance.

Why the others are wrong:

• B: $370 likely misadds unrecorded items ($70 + $280 =$350, close but incorrect total).
• C: $310 has no clear tie to given figures or formula.
• D: $320 has no clear tie to given figures or formula.

Final answer: A