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JAMB Principles of Accounts 2009 Question 13

Question 13

Banking and Bank Reconciliation

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

  1. A.Error by the bank
  2. B.Undercasting of the cash book
  3. C.Overcasting of the cash book
  4. D.Bank service charges
Show the answer and explanation

Answer: A (Error by the bank)

Explanation

An error by the bank is corrected on the bank statement, not in the cash book; undercasting, overcasting and bank charges are adjustments to the cash book balance.