Accounting Online Program Certification Practice Test

Which matters discovered by Daisy require adjustments resulting in a reduced current account balance?

1. Only the cashier's transfer error

2. Only unpresented cheques

3. Bank charges and cashier's transfer error

4. All matters discovered

The correct answer is: Bank charges and cashier's transfer error

The correct choice focuses on bank charges and the cashier's transfer error as the matters that require adjustments resulting in a reduced current account balance. Bank charges directly reduce the amount of money available in the account, as they represent expenses that the bank withdraws from the account without prior notice to the account holder. When these charges are identified, they must be adjusted in the accounting records to ensure that the reported balance accurately reflects the actual funds available. Similarly, the cashier's transfer error refers to a mistake made in the transfer of funds, which may lead to an inflow or outflow of cash that is not accurately recorded. If the transfer error resulted in less money being credited to the account than it should have been, correcting this error would also necessitate reducing the balance of the account to reflect the real financial situation accurately. In contrast, unpresented cheques, which are cheques that have been issued but not yet cleared by the bank, do not immediately reduce the current account balance. Instead, they represent expected future reductions when the cheques are presented for payment. Thus, while they are important to consider in managing cash flow, they do not directly contribute to an adjustment that results in a reduced balance at the time of analysis. Therefore, the