A Level Accounting (9706)•9706/13/O/N/24

Explanation
Updating cash book for unrecorded bank items
Steps:
- Start with debit balance: $25,000
- Subtract unrecorded direct debits: 6,500 = $18,500
- Add unrecorded customer deposits: 5,500 = $24,000
- Subtract unrecorded bank charges: 1,500 = $22,500
Why C is correct:
- Cash book balance reflects all bank transactions per double-entry accounting, adjusted to $22,500 after including outflows and inflows.
Why the others are wrong:
- A: Mistakenly subtracts the $4,500 as an additional outflow, ignoring it's not an unrecorded cash book item.
- B: Results from arithmetic error, like subtracting customer deposits instead of adding.
- D: Ignores all unrecorded items, leaving original balance unchanged.
Final answer: C
Topic: Reconciliation and verification
Practice more A Level Accounting (9706) questions on mMCQ.me