Causes of Discrepancies Between Cash Book And Bank Statement - SS2 Accounting Past Questions and Answers - page 1
What is one cause of discrepancies between a cash book and a bank statement?
Timing differences
Correct recording of transactions
Matching transactions with invoices
What can cause a difference between the cash book balance and the bank statement balance?
Recording transactions correctly
Deposits and withdrawals being processed on the same day
Outstanding checks or deposits
What is an example of a timing difference that could cause a discrepancy?
Bank errors in recording transactions
Fees and interest charges
Deposits recorded in the cash book but not yet cleared by the bank
What is the cause of a discrepancy between the cash book and bank statement that may indicate fraud or theft?
Timing differences
Errors in recording
Unauthorized transactions
What is the significance of reconciling the cash book with the bank statement?
Reconciling the cash book with the bank statement helps to ensure that the recorded transactions are accurate and complete, and to identify any discrepancies or errors.
What steps can be taken to identify the cause of a discrepancy between the cash book and bank statement?
The steps that can be taken to identify the cause of a discrepancy between the cash book and bank statement include reviewing both records for errors or omissions, verifying the timing of transactions, checking for outstanding checks or deposits, and investigating potential fraud or theft.