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A Level Accounting (9706)•9706/12/O/N/24
Question 11 from 9706/12/O/N/24

Explanation

Adjusting cash book for unrecorded bank items

Steps:

  • Start with cash book debit balance of $900.
  • Subtract unrecorded bank charges: 900−900 - 900−250 = $650.
  • Subtract unrecorded direct debit: 650−650 - 650−280 = $370.
  • Add unrecorded credit transfer: 370+370 + 370+300 = $670.

Why B is correct:

  • Bank reconciliation requires updating the cash book with unrecorded items to match the true bank position, yielding $670 after deductions and addition.

Why the others are wrong:

  • A. $70: Subtracts all items without adding credit transfer.
  • C. $1,290: Adds credit transfer to original without any subtractions.
  • D. $1,130: Subtracts only bank charges from original balance.

Final answer: B

Topic: Reconciliation and verification

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