56 questions. Try each one, then open the answer to check yourself and read the explanation.
Which of the following is not an intangible asset?
Answer: D (Fixtures.)
Fixtures are physical (tangible) assets; licences, patents and trademarks are rights with no physical form.
Which of the following is a capital expenditure?
Answer: D (Purchase of furniture.)
Buying furniture gives a long-lasting asset, so it is capital expenditure.
The excess of current assets over current liabilities is
Answer: B (working capital)
Working capital = current assets − current liabilities.
Williams and Jacob are in partnership but there is no partnership agreement. The capital contributed are N60,000 and N40,000 respectively. Profit for the year is N20,000. Interest on capital is 10%.
What is Williams' share of profit?
Answer: D (N5,000.)
Interest on capital takes 6,000 + 4,000 = 10,000; the remaining 10,000 is shared equally (no agreement), so Williams gets N5,000.
Williams and Jacob are in partnership but there is no partnership agreement. The capital contributed are N60,000 and N40,000 respectively. Profit for the year is N20,000. Interest on capital is 10%.
What is Jacob's share of profit?
Answer: C (N5,000)
The residual profit of N10,000 is shared equally, so Jacob's share is N5,000.
Williams and Jacob are in partnership but there is no partnership agreement. The capital contributed are N60,000 and N40,000 respectively. Profit for the year is N20,000. Interest on capital is 10%.
If Williams introduces cash of N10,000 by way of loan to the partnership, how much interest will he earn per annum on the loan?
Answer: D (N500.)
Without an agreement, the Partnership Act allows 5% interest on a partner's loan: 5% × 10,000 = N500.
Williams and Jacob are in partnership but there is no partnership agreement. The capital contributed are N60,000 and N40,000 respectively. Profit for the year is N20,000. Interest on capital is 10%.
What is Williams' interest on capital?
Answer: C (N6,000)
10% × N60,000 = N6,000.
In a bonus issue of one new share for every four held, a holder of 100,000 shares will get additional shares of
Answer: B (25,000)
100,000 ÷ 4 = 25,000 bonus shares.
A partner who has full powers of participating in the conduct of a partnership business is a
Answer: A (general partner)
A general (active) partner takes part in running the business and has unlimited liability.
The ratio which measures the solvency of a firm is the
Answer: A (quick ratio)
The quick (acid-test) ratio shows whether the firm can pay its short-term debts.
When goods are purchased on account, the accounting entries are
Answer: A (debit Purchases Account, credit Supplier's Account)
Credit purchases: debit purchases and credit the supplier, who is now owed money.
Closing stock was overstated. The effect is that
Answer: D (gross profit was overstated.)
Too high a closing stock makes cost of goods sold too low, so gross profit is too high.
XYZ Enterprises bought ABC Enterprises by issuing 30,000 ordinary shares of N1 each at a discount of 5%. The assets of ABC Enterprises are Stock N18,000, Debtors N11,000
The purchase consideration was
Answer: C (N28,500)
30,000 shares × N0.95 = N28,500.
XYZ Enterprises bought ABC Enterprises by issuing 30,000 ordinary shares of N1 each at a discount of 5%. The assets of ABC Enterprises are Stock N18,000, Debtors N11,000
Capital reserve was
Answer: C (N500)
Net assets 18,000 + 11,000 = 29,000 − consideration 28,500 = N500 capital reserve.
The entries necessary for recording profit loading on goods sent to branch are
Answer: B (credit Branch Stock Adjustment Account, debit Goods sent to Branch Account)
Goods sent are first recorded at selling price; the loading is then taken out of goods sent to branch (debit) and credited to branch stock adjustment.
Expenses incurred when incorporating a company are
Answer: A (preliminary expenses)
Costs of forming a company are preliminary (formation) expenses.
Gross Profit of a business is the
Answer: C (excess of sales over the cost of goods sold)
Gross profit = net sales − cost of goods sold.
Prepaid rent of N650 had been recorded as N560. This is an error of
Answer: D (original entry)
The wrong figure was used from the start in both entries, an error of original entry.
When a buyer is under-charged, the seller forwards
Answer: A (a debit note)
A debit note tells the buyer his account has been debited with the extra amount.
Rent owing as at 31st December 1998 N800. Rent paid up to 31st December 1998 N1,700. Rent owing as at 1st January 1998 N500
Rent charged to the Profit and Loss Account for the year 1998 is
Answer: A (N2,000)
Rent = paid 1,700 + owing at end 800 − owing at start 500 = N2,000.
Rent owing as at 31st December 1998 N800. Rent paid up to 31st December 1998 N1,700. Rent owing as at 1st January 1998 N500
The closing balance for 1998 is an item under
Answer: A (current liability)
Rent owing at the year end is a current liability.
In computing, external storage is called
Answer: A (backing storage)
Disks and other storage outside main memory are called backing (secondary) storage.
Profit expressed as a fraction of the selling price is known as
Answer: B (margin)
Margin is profit as a fraction of selling price; mark-up is based on cost.
In computing, ALU stands for
Answer: B (Arithmetic Logic Unit)
The ALU (arithmetic logic unit) performs calculations and comparisons in the CPU.
Which of the following is not a Petty Cash Book item? Purchase of
Answer: D (machinery.)
Machinery is a large capital purchase, not a small petty cash expense.
Opening Stock: raw materials N6,500; work-in-progress N2,500
Closing Stock: raw materials N4,000; work-in-progress N1,000
Purchases of raw materials N12,500
Manufacturing wages N2,000
Factory rent N500
What is the cost of raw materials consumed?
Answer: C (N15,000)
6,500 + 12,500 − 4,000 = N15,000.
Opening Stock: raw materials N6,500; work-in-progress N2,500
Closing Stock: raw materials N4,000; work-in-progress N1,000
Purchases of raw materials N12,500
Manufacturing wages N2,000
Factory rent N500
What is the cost of production?
Answer: A (N19,000)
Prime cost 17,000 + factory rent 500 + opening WIP 2,500 − closing WIP 1,000 = N19,000.
Opening Stock: raw materials N6,500; work-in-progress N2,500
Closing Stock: raw materials N4,000; work-in-progress N1,000
Purchases of raw materials N12,500
Manufacturing wages N2,000
Factory rent N500
What is the prime cost?
Answer: D (N17,000.)
Materials 15,000 + wages 2,000 = N17,000.
The vote book in Public Sector Accounting is used to
Answer: B (control expenditure)
The vote book controls spending so that it does not exceed the vote approved.
The accounting entry for depreciation at the end of each year is to debit
Answer: D (Manufacturing Account and credit Provision for Depreciation Account.)
The year's depreciation is an expense: debit the manufacturing (or profit and loss) account and credit the provision for depreciation.
An account is said to have a debit balance because
Answer: C (total value of debit entries is more than total value of credit entries)
The balance depends on which side has the bigger total value, not the number of entries.
A motor vehicle bought for N16,000 was estimated to have a useful life span of 4 years and a scrap value of N2,000.
What is the net book value of the motor vehicle at the end of the third year, using the straight line method?
Answer: B (N5,500)
Yearly depreciation (16,000 − 2,000) ÷ 4 = 3,500; after 3 years 10,500, so NBV = N5,500.
A motor vehicle bought for N16,000 was estimated to have a useful life span of 4 years and a scrap value of N2,000.
Using the straight line method, what is the amount of depreciation charged per annum?
Answer: D (N3,500)
(16,000 − 2,000) ÷ 4 = N3,500.
A motor vehicle bought for N16,000 was estimated to have a useful life span of 4 years and a scrap value of N2,000.
If the vehicle is sold for N6,000 at the end of third year, what is the profit or loss on sale?
Answer: B (N500 profit)
Sale 6,000 − NBV 5,500 = N500 profit.
The double entry for increasing provision for bad debt is debit
Answer: D (Profit and Loss Account, credit Provision for Bad Debt Account.)
An increase in the provision is an expense (debit profit and loss) and raises the provision (credit).
Bills receivable is a
Answer: B (current asset.)
A bill receivable is money due to the business soon, a current asset.
How much did Olu sell goods bought at N1,000 if he sells at a margin of 20% on selling price?
Answer: A (N1,250)
Cost is 80% of selling price: 1,000 ÷ 0.8 = N1,250.
Which of the following accounts has a debit balance?
Answer: D (Share discount.)
Share discount is a loss on issue, shown as a debit balance; the reserves and premium are credits.
A list of all credit and debit balances from the ledger accounts is
Answer: A (Trial Balance)
That list is the trial balance.
Sales: N14,600
Purchases: N5,500
Returns inward: N150
Rent: N2,000
Salaries: N1,000
Discount received: N400
Closing stock: N250
Opening stock: N100
The cost of goods sold is
Answer: A (N5,350)
100 + 5,500 − 250 = N5,350.
Sales: N14,600
Purchases: N5,500
Returns inward: N150
Rent: N2,000
Salaries: N1,000
Discount received: N400
Closing stock: N250
Opening stock: N100
Gross Profit is
Answer: D (N9,100.)
Net sales 14,450 − cost of sales 5,350 = N9,100.
Sales: N14,600
Purchases: N5,500
Returns inward: N150
Rent: N2,000
Salaries: N1,000
Discount received: N400
Closing stock: N250
Opening stock: N100
Net Sales is
Answer: D (N14,450)
14,600 − returns inwards 150 = N14,450.
Sales: N14,600
Purchases: N5,500
Returns inward: N150
Rent: N2,000
Salaries: N1,000
Discount received: N400
Closing stock: N250
Opening stock: N100
Net Profit is
Answer: D (N6,500.)
9,100 + discount received 400 − rent 2,000 − salaries 1,000 = N6,500.
The capital of a not-for profit making organization is
Answer: B (accumulated fund)
A club's capital is called its accumulated fund.
Which of the following is used in locating errors in the ledger?
Answer: C (Control Account)
Control accounts show which ledger an error is in, so it can be found quickly.
A reserve is an amount
Answer: B (set out of profit for future use)
A reserve is profit kept back (appropriated) for future use.
The document which authorises the Minister of Finance to release fund for government expenditure is
Answer: A (a warrant)
A warrant authorises release of public funds.
Section A – Theory of Financial Accounting (answer two questions only from this section)
1. (a) List five items that will cause the Cash Book balance not to agree with the Bank Statement balance. (b) Explain how the items listed in (a) above may cause a difference between the Cash Book balance and Bank Statement balance.
(a) Any five: unpresented cheques; uncredited lodgements (cheques paid in but not yet credited); bank charges and interest; standing orders/direct debits; direct credits (credit transfers, dividends received by the bank); dishonoured cheques; errors in the cash book or by the bank.
(b) Unpresented cheques: entered as payments in the cash book but not yet deducted by the bank, so the bank balance is higher.
Uncredited lodgements: entered as receipts in the cash book but not yet added by the bank.
Bank charges/interest: deducted by the bank but not yet in the cash book.
Standing orders: paid by the bank on the customer's instruction and only discovered from the statement.
Direct credits: money received straight into the bank and not yet entered in the cash book.
Dishonoured cheques: entered as received in the cash book but returned unpaid and deducted by the bank.
Errors: wrong figures, additions or postings in either record.
For each item say which record has it and which does not yet.
2. (a) Differentiate between adjustments and closing entries. (b) Explain how the following items are treated in the final accounts: (i) provision for doubtful debts; (ii) prepaid expenses; (iii) accrued income; (iv) depreciation on fixed assets.
(a) Adjustments are entries made at the end of a period to bring the accounts up to date (accruals, prepayments, depreciation, provisions) so that income and expenses belong to the right period. Closing entries are the transfers made at the end of the period to close the income and expense accounts into the trading and profit and loss account.
(b)(i) Provision for doubtful debts: the provision (or the increase in it) is debited to profit and loss; in the balance sheet it is deducted from debtors.
(ii) Prepaid expenses: deducted from the expense in profit and loss; shown as a current asset in the balance sheet.
(iii) Accrued income: added to the income in profit and loss; shown as a current asset (amount receivable) in the balance sheet.
(iv) Depreciation: charged as an expense in profit and loss (or manufacturing account); the accumulated depreciation is deducted from the cost of the asset in the balance sheet to give net book value.
Each adjustment has two effects: one in the profit and loss account and one in the balance sheet.
3. (a) Mention three features of not-for-profit making organizations. (b) Give two similarities and two differences between a Receipt and Payment Account and an Income and Expenditure Account.
(a) Any three: they are not set up to make profit but to serve members or society; their income comes mainly from subscriptions, donations, grants and fund-raising; any surplus is used for the organisation's aims and not shared among members; their capital is called the accumulated fund; they prepare receipts and payments and income and expenditure accounts instead of trading and profit and loss accounts.
(b) Similarities (any two): both are prepared by non-profit organisations; both cover the same period; both summarise the organisation's transactions; both are prepared at the end of the year from the books.
Differences (any two): receipts and payments is a summary of the cash book (a real account) while income and expenditure is like a profit and loss account (nominal); receipts and payments includes capital and revenue items, income and expenditure only revenue items; receipts and payments is on a cash basis, income and expenditure on an accruals basis (adjusted for accruals and prepayments); receipts and payments ends with a cash balance, income and expenditure with a surplus or deficit; depreciation appears only in income and expenditure.
Remember: receipts and payments is about cash, income and expenditure is about surplus.
4. (a) What are accounting concepts? (b) State the accounting concept or convention which best explains each of the following statements: (i) Unless there is an evidence to the contrary, accounting assumes that a business will operate into the foreseeable future. (ii) Revenues and expenses are recognised as they are earned or incurred and not when money is received or paid. (iii) The accounting treatment of items should be continuously applied from one accounting period to the next. (iv) A business should not lay claim to any profits before they have been earned with reasonable certainty but should anticipate future losses. (v) An accounting statement should not be influenced by the personal bias of the person preparing it (vi) The assumption that for reporting purposes the life of an enterprise can be divided into discrete time period.
(a) Accounting concepts are the basic assumptions and rules on which financial statements are prepared, so that accounts are consistent and comparable.
(b)(i) Going concern concept.
(ii) Accruals (matching) concept.
(iii) Consistency concept.
(iv) Prudence (conservatism) concept.
(v) Objectivity concept.
(vi) Periodicity (accounting period) concept.
Match the key idea in each statement: future, earned/incurred, same treatment, caution, no bias, time periods.
Section B – Financial Accounting Practice (answer three questions only from this section)
5. Prosperity Industries is a small business producing and selling food beverage. The following list of balances has been extracted from the books as at 31 December, 1998.
Sales N225,000
Purchases of raw materials N45,000
Carriage inwards on raw materials N2,000
Carriage outwards on finished goods N1,000
Wages – Factory operatives N46,250
Salaries – Factory supervisors N11,250
– Management and clerical staff N31,000
– Sales and marketing staff N26,000
General expenses N4,875
Electricity and rent N16,000
Insurance N2,375
Advertising N5,000
Discounts received N1,500
Plant and machinery N23,000
Delivery van N9,000
Stocks at 1/1/98: Raw materials N8,500; Work-in-progress N5,250; Finished goods N10,000
Stocks at 31/12/98: Raw Materials N7,250; Work-in-progress N8,000; Finished goods N12,500
Additional information:
(a) Depreciation for the year is to be charged as follows: Plant and machinery at 10% per annum. Delivery van at 20% per annum. (b) At 31/12/98 insurance prepaid was N375 and general expenses owing amounted to N125 (c) Apportionment of expenses is to be made as follows (Factory; Administration): Electricity and rent 80%; 20%. Insurance and general expenses 75%; 25%.
You are required to prepare: (i) Manufacturing Account; and (ii) a Trading and Profit and Loss Account for the year ended 31st December, 1998.
Workings: insurance 2,375 − 375 = 2,000; general expenses 4,875 + 125 = 5,000; together 7,000 → factory 5,250, office 1,750. Electricity and rent 16,000 → factory 12,800, office 3,200.
(i) Manufacturing account: raw materials 8,500 + purchases 45,000 + carriage inwards 2,000 − closing 7,250 = 48,250 used; factory wages 46,250; prime cost 94,500.
Overheads: supervisors' salaries 11,250; electricity and rent 12,800; insurance and general expenses 5,250; depreciation of plant 2,300 (10% × 23,000); total 31,600. Add opening WIP 5,250, less closing WIP 8,000: cost of production 123,350.
(ii) Trading: sales 225,000; opening finished goods 10,000 + 123,350 − 12,500 = cost of sales 120,850; gross profit 104,150.
Profit and loss: add discounts received 1,500 = 105,650. Expenses: carriage outwards 1,000; management and clerical salaries 31,000; sales and marketing salaries 26,000; electricity and rent 3,200; insurance and general expenses 1,750; advertising 5,000; depreciation of delivery van 1,800 (20% × 9,000); total 69,750.
Net profit 35,900.
Factory costs go to the manufacturing account, selling and office costs to profit and loss.
6. The Balance Sheet of Sosseh Limited as at 30th June, 1998 shows motor vehicles as follows:
Motor vehicles at cost N618,500
Less Depreciation N324,260
N294,240
Vehicles are depreciated on the straight line basis over a five year life. Depreciation is charged pro-rata to time in the year of acquisition but no charge is made in the year of disposal. The Disposal Account is written up to the last day of each year. During 1997 – 1998, the following vehicles were purchased:
30th September KMC 1041A N86,000
31st October BJL419A N107,000
28th February KMC 2121A N40,000
Sale of vehicles:
31st October GA4242 N3,000; original cost N28,000
31st December GA 3001 N5,400; original cost N24,000
31st March GA426 N4,200; original cost N19,000
The vehicles were originally purchased on 1st July, 1994; 30th November, 1995 and 1st April, 1996 respectively.
You are required to prepare: (a) Vehicles Account; (b) Vehicles Depreciation Account; and (c) Vehicles Disposal Account.
Taking the balance sheet figures as the opening balances of the year of the purchases and sales (a year ending 30th June), with 20% a year on cost (five-year life):
(a) Vehicles account: balance b/f 618,500; bank 86,000 + 107,000 + 40,000 = 851,500. Disposal 28,000 + 24,000 + 19,000 = 71,000. Balance c/d 780,500.
Depreciation on vehicles sold (full years only up to the year before sale): GA4242 4 years × 5,600 = 22,400; GA3001 7 months 2,800 + 2 years 9,600 = 12,400; GA426 3 months 950 + 2 years 7,600 = 8,550; total 43,350.
Charge for the year: vehicles kept all year (618,500 − 71,000) × 20% = 109,500; KMC1041A 86,000 × 20% × 9/12 = 12,900; BJL419A 107,000 × 20% × 8/12 = 14,267; KMC2121A 40,000 × 20% × 4/12 = 2,667; total 139,334.
(b) Depreciation account: balance b/f 324,260 + profit and loss 139,334 − disposal 43,350 = balance c/d 420,244.
(c) Disposal account: Dr vehicles 71,000. Cr depreciation 43,350; bank 12,600 (3,000 + 5,400 + 4,200); loss on disposal to profit and loss 15,050 (2,600 + 6,200 + 6,250).
Work out the accumulated depreciation of each vehicle sold before writing up the disposal account; no charge is made in the year of sale.
7. Audu Bako is a trader. The following balances were extracted from his books on 31st July, 1998.
Sales N307,442
Sales ledger control N28,860
Stock-in-trade 1/8/97 N21,488
Trade subscriptions N104
Telephone and postages N884
Travellers commission N14,968
Salaries N10,432
Rent paid N2,280
Purchases N253,066
Purchases ledger control N12,358
Printing expenses N1,578
Petty cash in hand N32
Equipment and office furniture N3,240
Electricity N812
Insurance N504
Miscellaneous expenses N3,046
Drawings – Audu Bako N7,054
Discount allowed N770
Discount received N1,452
Cash at Bank N8,464
Capital Account – Balance 1/8/97 N36,814
Bad debts written off N484
Additional information:
(a) Amounts owing by Audu Bako on 31st July, 1998 were Rent N760, Travellers commission and expenses N1,230, Electricity N112. (b) Stock at 31st July, 1998 was N19,112. (c) Provision: Accountancy charges N462. Doubtful debts N580. (d) Office furniture and equipment is to be depreciated by 10 percent.
You are required to prepare: (i) Trading and Profit and Loss Account for the year ended 31st July, 1998; and (ii) a Balance Sheet as at that date.
(i) Trading: sales 307,442; opening stock 21,488 + purchases 253,066 − closing stock 19,112 = cost of sales 255,442; gross profit 52,000.
Profit and loss: add discount received 1,452 = 53,452. Expenses: trade subscriptions 104; telephone 884; travellers' commission 14,968 + 1,230 = 16,198; salaries 10,432; rent 2,280 + 760 = 3,040; printing 1,578; electricity 812 + 112 = 924; insurance 504; miscellaneous 3,046; discount allowed 770; bad debts 484; accountancy charges 462; provision for doubtful debts 580; depreciation 324 (10% × 3,240); total 39,330. Net profit 14,122.
(ii) Balance sheet: equipment and furniture 3,240 − 324 = 2,916.
Current assets: stock 19,112; debtors 28,860 − 580 = 28,280; bank 8,464; petty cash 32 = 55,888.
Current liabilities: creditors 12,358; accruals 760 + 1,230 + 112 = 2,102; accountancy charges 462 = 14,922. Working capital 40,966.
Net assets 43,882 = capital 36,814 + net profit 14,122 − drawings 7,054.
Add every amount owing to its expense and show it again as a current liability.
8. The following information has been extracted from the books of C. Bintu:
January 1 Balance at bank N683.
January 1 Drew and cashed cheque for N500
January 1 Bought for cash 14 model coats for N282.
January 3 B. Aluko paid by cheque N100 on account. Paid cheque into bank.
January 5 Sold for cash two costumes at N36 and N33 respectively.
January 5 Paid in cash, wages N72 and office expenses N10.
January 9 Paid by cheque, H. Abba Account N258 less 5% discount.
January 10 Cash sales to date, N76.
January 12 Paid by cheque M. Harrison Account N300.
January 14 Paid in cash carriage N33.
January 18 Paid by cheque B. Banjo Account N82.
January 13 Gave H. Abba a cheque on account N100.
January 18 Cash sales for the week N190.
January 18 B. Daodu paid N250 by cheque. Paid cheque into bank.
January 21 Purchased for cash 7 packets office pins at N1.17 per packet.
January 22 Paid cash into bank N100
You are required to prepare a three column Cash Book to record the above transactions.
Three-column cash book (discount, cash, bank)
Dr side: Jan 1 balance b/d bank 683; Jan 1 bank (contra) cash 500; Jan 3 B. Aluko bank 100; Jan 5 sales cash 69; Jan 10 sales cash 76; Jan 18 sales cash 190; Jan 18 B. Daodu bank 250; Jan 22 cash (contra) bank 100. Totals: cash 835, bank 1,133; balance c/d bank 94.10 (overdrawn) to make 1,227.10.
Cr side: Jan 1 cash (contra) bank 500; Jan 1 purchases cash 282; Jan 5 wages cash 72; office expenses cash 10; Jan 9 H. Abba bank 245.10, discount received 12.90; Jan 12 M. Harrison bank 300; Jan 13 H. Abba bank 100; Jan 14 carriage cash 33; Jan 18 B. Banjo bank 82; Jan 21 office pins cash 8.19 (7 × 1.17); Jan 22 bank (contra) cash 100; balance c/d cash 329.81. Totals: discount 12.90; cash 835; bank 1,227.10.
Balances b/d: cash 329.81 (Dr); bank overdraft 94.10 (Cr).
Withdrawing cash from the bank for the business and paying cash into the bank are contra entries in both columns.
9. T. Emeka maintains a business bank account with 2nd Bank (Nigeria) Ltd. The bank statement received for the month of March 1999 showed a balance of N14,265 to his credit while according to his Cash Book, he should be having N13,380. Subsequent investigation revealed the following (a) Two cheques A000111 for N3,400 and X222419 for N6,000 deposited to the bank on 28th March, 1999 were not credited by the bank until 2nd April, 1999. (b) A cheque for N6,500 issued to Jango Ltd. had not been presented for payment (c) A cheque for N3,000 received from a customer in full settlement of a debt of N3,300 had been entered in the Cash Book at the full value of the debt. (d) Dividend of N650 from PZ Ltd. had been paid direct to the bank. (e) The bank deducted a total of N125 as its charges. (f) The bank had credited a cheque of N3,560 of V. Amaka in error to T. Emeka Account.
You are required to prepare: (i) Adjusted Cash Book; and (ii) a Bank Reconciliation Statement for the month of March, 1999.
(i) Adjusted cash book: balance 13,380 + dividend 650 = 14,030; less overstatement of the customer's cheque 300 (3,300 − 3,000) and bank charges 125; adjusted balance 13,605.
(ii) Bank reconciliation statement, 31st March 1999: balance as per bank statement 14,265; add uncredited cheques 3,400 + 6,000 = 23,665; less unpresented cheque 6,500 and V. Amaka's cheque wrongly credited 3,560 = 13,605 = balance as per adjusted cash book.
Correct the cash book for items the bank already knows about; timing differences and bank errors go in the reconciliation.