A Level Accounting (9706)•9706/12/M/J/24
Explanation
Adjusting bank statement for outstanding payment Steps:
- Bank statement credit balance is $342.
- Payment of $45 is entered in cash book but not on bank statement, reducing cash book balance relative to bank.
- Cash book balance = 45 = $297.
- Receipt of 6 already in cash book; credit transfer $17 not in cash book—all handled in reconciliation after changes.
Why A is correct:
- In bank reconciliation, outstanding payments recorded in cash book but not cleared by bank lower the cash book balance by that amount from the bank statement balance.
Why the others are wrong:
- B. $301: Fails to subtract full outstanding payment amount.
- C. $304: Wrong adjustment, possibly adding charges instead of subtracting payment.
- D. $342: Equals unadjusted bank statement balance, ignoring outstanding payment.
Final answer: A
Topic: Reconciliation and verification
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