Accounting · Bank Reconciliation Statement
Consider the following statements regarding bank reconciliation: Statement 1: In a situation where a firm is operating with a bank overdraft, the balance as per the cash book will be a credit balance. Statement 2: A stale cheque is one that has been issued by the firm but has not been presented for payment within the valid period of three months, and must be adjusted back in the accounting records. Statement 3: When a deposited cheque is returned dishonored, the bank debits the firm's account, requiring a corresponding credit entry in the cash book to update the balance. Which of the following options correctly identifies the validity of these statements?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1All statements are correct.✓
- 2Statements 1 and 2 are correct; Statement 3 is incorrect.
- 3Only Statement 1 is correct.
- 4Statements 2 and 3 are correct; Statement 1 is incorrect.
Correct answer
All statements are correct.
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