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JAMB Principles of Accounts 1999 Question 10

Question 10

Banking and Bank Reconciliation

Which of the following bank reconciliation items should not be added or subtracted from the bank statement balance to determine the adjusted cash balance?

  1. A.Outstanding cheques
  2. B.Bank service charges
  3. C.Deposits in the mail not yet received by the bank
  4. D.Bank error, charging a company for another company's cheque.
Show the answer and explanation

Answer: B (Bank service charges)

Explanation

Bank charges already appear on the bank statement, so they adjust the cash book balance, not the bank balance. The other three adjust the bank statement balance.