Question

The following information is provided for Yesson Ltd for the month ended 31 December 2020. The balance shown on the cash book is £4,624. Consider the following information and calculate the adjusted cash book balance for 31 December 2020.

• Bank charges of £79 shown on the bank statement have not been recorded
• A cheque in the amount of £90 has not been presented to the bank.
• Direct debits of £367 appear only on the bank statement
• Lodgements not yet presented at the bank amount to £525Considering the following information for Yesson Ltd, calculate the adjusted cash book balance for 31 December 2020.
a) £5,102
b) £4,339
c) £4,273
d) £4,717

Answer 1

To calculate the adjusted cash book balance, subtract the unrecorded bank charges, unprocessed cheque, direct debits, and unpresented lodgements from the cash book balance.

Step-by-step explanation:

To calculate the adjusted cash book balance for Yesson Ltd on December 31, 2020, we need to consider the provided information and make the necessary adjustments:

1. We subtract the bank charges of £79 from the cash book balance, as they are not yet recorded.
2. We subtract the amount of the cheque not presented to the bank (£90) from the adjusted balance, as it has not been processed yet.
3. We subtract the direct debits of £367 appearing only on the bank statement, as they have not been reflected in the cash book.
4. We subtract the lodgements not yet presented at the bank (£525) from the adjusted balance.

By performing these adjustments, we can calculate the adjusted cash book balance, which is £4,717. Therefore, the correct answer is d) £4,717.