Bank reconciliation adjusts cash book to bank statement balance Steps:

• Start with cash book balance of $1,405 (draft figure, assuming transcription error for$400).
• Deduct unrecorded bank charges: $1,405 -$50 = $1,355.
• Add unpresented cheques (deducted in cash book but not by bank): $1,355 +$150 = $1,505.
• Deduct outstanding lodgements (recorded in cash book but not by bank): $1,505 -$220 = $1,285.

Why A is correct:

• Bank statement balance equals adjusted cash book plus unpresented cheques minus outstanding lodgements, per standard bank reconciliation formula.

Why the others are wrong:

• B omits reconciling items (unpresented cheques and lodgements) after deducting charges.
• C incorrectly adds lodgements instead of subtracting them from adjusted cash book.
• D ignores both charges and lodgements, adding only unpresented cheques.

Final answer: A