Bank Reconciliation for Unrecorded Statement Items Steps:

• Cash book shows bank overdraft of $200 (balance -$200).
• Add interest received $500 (in statement, not in cash book): -$200 + $500 =$300.
• Subtract bank charges $100 (in statement, not in cash book):$300 - $100 =$200.
• This adjusted balance equals the credit balance on the bank statement.

Why C is correct:

• Bank reconciliation requires adjusting the cash book balance for statement items not yet recorded, yielding $200 credit per standard procedure.

Why the others are wrong:

• A ignores interest and charges adjustments to the overdraft.
• B adds only interest to overdraft, omitting charges.
• D incorrectly treats all items as additions without netting the overdraft.

Final answer: C