Edexcel IGCSE Accounting: Correction of errors and bank reconciliation statements (4AC1) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover sections 3.3 Correction of errors and 3.4 Bank reconciliation statements of Topic 3, Introduction to control processes, in the Pearson Edexcel International GCSE in Accounting (4AC1) specification, Issue 1 (October 2016). The specification does not split them into tiers. All amounts are in dollars, and the businesses are invented.

Read the study guide or the revision notes first. Course links: the Edexcel IGCSE Accounting hub, the printable checklist and the free diagnostics.

Questions

1. Rushgrove Traders found four errors. For each one, state whether the trial balance still agreed, and give a reason.

(a) A purchase of goods on credit for 1,750 was debited to purchases but not credited to the supplier. [2] (b) A credit sale of 610 was entered as 160 in both the sales account and the customer’s account. [2] (c) An insurance cheque for 480 was debited to the rent account. [2] (d) The credit side of the sales account was added up 100 too low. [2]

2. Write journal entries, with narratives, to correct each error.

(a) A credit purchase of 530 from T. Hale was never recorded. [2] (b) Office furniture bought for 1,400 was debited to purchases. [2] (c) A cheque of 360 from a customer, D. Marsh, was debited to Marsh’s account and credited to bank. [2] (d) A rent payment of 650 was recorded as 560 in both the rent and bank accounts. [2]

3. Explain two reasons why an agreeing trial balance does not prove that the books are free from error. [4]

4. A business’s trial balance has debit totals of 39,110 and credit totals of 38,720. State which side of a suspense account receives the difference and the amount, and give one error that could cause this. [3]

5. The trial balance of Mirebrook Stores at 31 December 2026 has a debit total of 61,845 and a credit total of 62,510. The difference was placed in a suspense account. These errors are then found.

• Wages of 275 were paid by cheque. The bank entry was made but the wages account was not debited.
• A sales return of 150 was credited to the sales returns account instead of being debited.
• The purchases account was added up 90 too low.

(a) State the entry made in the suspense account for the difference. [2] (b) Write the journal entry to correct each error. [6] (c) Prepare the suspense account. [3]

6. Explain why a business might open a suspense account, and why it should not stay open. [4]

7. (a) Explain the purpose of a bank reconciliation statement. [3] (b) State two reasons why the bank statement and cash book balances differ. [2]

8. For each item, state whether it needs a cash book entry or appears on the bank reconciliation statement. For a cash book entry, say whether it increases or decreases the cash book balance.

• (i) A cheque to a supplier not yet cleared by the bank [1]
• (ii) Bank charges [1]
• (iii) A lodgement made on the last day of the month, not yet on the statement [1]
• (iv) A standing order [1]
• (v) A customer’s cheque returned unpaid [1]
• (vi) Bank interest received [1]

9. The cash book (bank column) of Dovecross Carpets at 30 November 2026 shows a debit balance of 5,120. The bank statement shows bank charges of 62, a credit transfer from a customer of 840, a direct debit of 175 and bank interest received of 9. A cheque issued for 1,920 was entered in the cash book as 1,290. Update the cash book and state the new balance. [6]

10. The updated cash book of Dovecross Carpets at 30 November 2026 shows a balance of 5,102. Cheques of 410, 275 and 135 have not been presented, and a lodgement of 1,650 is not yet on the bank statement. Prepare the bank reconciliation statement. [6]

11. The cash book (bank column) of Farnleigh Joinery at 31 December 2026 shows an overdraft of 2,340. The bank statement shows these items that are not in the cash book: bank charges 85, interest charged on the overdraft 48, a direct debit 210, a credit transfer from a customer 900 and a customer’s cheque for 320 dishonoured. Cheques of 760 have not been presented, and a lodgement of 1,150 is not on the statement.

(a) Show how the cash book is updated and state the new balance. [7] (b) Prepare the bank reconciliation statement. [5]

12. A bank statement shows a balance of 3,020. The cash book, with no items missing from it, shows 2,680. Cheques of 640 have not been presented and a lodgement of 300 is not yet on the statement. Sana says 340 has been lost and should be written off. Show whether she is right. [4]

Answers

1. (a) No: the debit has no matching credit [1]. This is a one-sided entry [1]. (b) Yes: both entries use the same wrong figure [1]. This is an error of original entry [1]. (c) Yes: the debit and credit are equal, only the wrong expense account was used [1]. This is an error of commission [1]. (d) No: a casting error makes the credit total 100 lower than the debit total [1]. It disturbs one side only [1]. Examiner insight: a bare “yes” or “no” is rarely enough on a question like this; the reason about equal or unequal debits and credits is what shows understanding.

2. (a) Dr Purchases 530 [1], Cr T. Hale 530, narrative: purchase omitted [1]. (b) Dr Office furniture 1,400 [1], Cr Purchases 1,400, narrative: capital item [1]. (c) Dr Bank 720 [1], Cr D. Marsh 720, narrative: receipt posted to the wrong sides [1]. (d) Dr Rent 90 [1], Cr Bank 90, narrative: payment under-recorded [1]. Examiner insight: the amount in a complete reversal is twice the original, and the amount in an original entry error is only the difference; check both before moving on.

3. A compensating error leaves the totals equal [1] because one overstatement offsets an equal understatement on the opposite side [1]. An error of omission leaves the totals equal [1] because the debit and credit were both missed [1]. Other types of error are acceptable if explained. Examiner insight: naming an error type without explaining why the totals still agree usually leaves half the marks unclaimed.

4. Debit total is higher by 390 (39,110 − 38,720) [1], so the difference is credited [1] to suspense. One cause: a purchase debited to purchases with no credit to the supplier [1]. Examiner insight: work out which total is higher before choosing a side; the total that is lower needs the extra entry.

5. (a) Credit total − debit total = 62,510 − 61,845 = 665 [1]. Debit suspense with 665 [1]. (b) Wages: Dr Wages 275, Cr Suspense 275 [1][1]. Sales returns: Dr Sales returns 300, Cr Suspense 300 [1][1]. Purchases: Dr Purchases 90, Cr Suspense 90 [1][1]. (c)

Suspense account
Difference per trial balance	665	Wages	275
		Sales returns	300
		Purchases	90
	665		665

Debit side shows 665 [1]. Credit side shows 275, 300 and 90 [1]. Both sides total 665, so the account clears [1]. Examiner insight: the return credited instead of debited is wrong by twice the amount, so the journal is 300, not 150.

6. It is opened when a trial balance does not agree [1] so the totals can be made equal while the errors are traced [1]. It should be cleared because the balance is not a real asset or liability [1]; it is only a placeholder for unfound mistakes, and a balance left in it shows errors remain [1]. Examiner insight: “to make the trial balance balance” is the starting point; the second mark generally needs the idea that it is temporary.

7. (a) To check the cash book against the bank’s record [1], find errors or omissions by either side [1] and show why balances differ, helping to detect fraud [1]. (b) Any two: unpresented cheques; uncredited lodgements; bank items not yet in the cash book (charges, direct debits, credit transfers); errors [1][1]. Examiner insight: give two different reasons, not one reason in two wordings; examples such as “bank charges” help to make a point specific.

8. (i) Reconciliation statement [1]. (ii) Cash book, decreases [1]. (iii) Reconciliation statement [1]. (iv) Cash book, decreases [1]. (v) Cash book, decreases [1]. (vi) Cash book, increases [1]. Examiner insight: the dishonoured cheque is the one often placed on the reconciliation by mistake; it is a bank entry the business has not yet recorded.

9. Opening balance 5,120 [1]. Less bank charges 62 [1]. Add credit transfer 840 and bank interest 9 [1]. Less direct debit 175 [1]. Less error 630 (1,920 − 1,290), because the payment was understated [1]. 5,120 − 62 + 840 + 9 − 175 − 630 = 5,102 [1]. Examiner insight: show the working line by line; a wrong sign on one item is easier to spot and partly credit when each step is visible.

10.

Bank reconciliation statement at 30 November 2026
Balance per updated cash book	5,102
Add: unpresented cheques (410 + 275 + 135)	820
	5,922
Less: uncredited lodgement	1,650
Balance per bank statement	4,272

Heading with date [1]. Starts with 5,102 [1]. Adds 820 [1]. Deducts 1,650 [1]. Correct result 4,272 [1]. Final line labelled [1]. Examiner insight: label the first and last lines clearly; an unlabelled figure at the end can be unclear about which balance it is.

11. (a) Overdraft 2,340 [1]. Add bank charges 85 [1]. Add interest 48 [1]. Add direct debit 210 [1]. Add dishonoured cheque 320 [1]. Less credit transfer 900 [1]. Updated overdraft: 2,340 + 85 + 48 + 210 + 320 − 900 = 2,103 [1]. (b) Reconciliation statement at 31 December 2026 [1]. Overdraft per updated cash book (2,103) [1]. Add unpresented cheques 760 giving (1,343) [1]. Less uncredited lodgement 1,150 [1]. Overdraft per bank statement (2,493) [1]. Examiner insight: write the overdraft as a negative or with the word “overdrawn”; leaving off the label changes the meaning of the figure.

12. Cash book 2,680 plus unpresented cheques 640 [1] gives 3,320, less uncredited lodgement 300 [1] gives 3,020 [1]. This equals the bank statement, so the 340 difference is explained by timing and nothing has been lost [1]. Sana is wrong. Examiner insight: a conclusion that links back to the question (“so no write-off is needed”) is usually needed in addition to the arithmetic.

Where marks are usually lost

• Saying whether the trial balance agrees without giving a reason.
• Journalising a complete reversal for the single amount.
• Journalising an original entry error for the full figure rather than the difference.
• Putting the suspense balance on the wrong side.
• Writing a journal with no narrative or with an unclear account name.
• Placing a dishonoured cheque on the reconciliation statement.
• Adjusting the cash book for unpresented cheques or uncredited lodgements.
• Mixing up the signs when overdrawn.
• Failing to label the first and last lines of the reconciliation statement.

Next steps

• Condensed recall: correction of errors and bank reconciliation revision notes
• Full teaching: correction of errors and bank reconciliation study guide
• Edexcel IGCSE Accounting hub and printable checklist
• Find your weak spots: the free diagnostics
• Book a free trial class

Frequently asked questions

How do you correct an error of original entry? An error of original entry puts the wrong figure in both accounts, so the correcting journal is for the difference between the wrong and right amounts, not the full figure. Journalising the full figure is a common error.

Where do unpresented cheques go? Unpresented cheques and uncredited lodgements are timing differences, so they appear only on the bank reconciliation statement. Adjusting the cash book for them is a common way to lose marks.

How should a bank reconciliation statement be laid out? Give it a heading and a date, start from the updated cash book balance (or the bank statement balance) and label the first and last lines clearly. Take care with signs when the account is overdrawn.

Is a dishonoured cheque shown on the bank reconciliation statement? No. A dishonoured cheque is entered in the cash book, where it reduces the balance, because the bank has already removed it from the account. It does not belong on the reconciliation statement.

Official syllabus

Pearson Edexcel International GCSE in Accounting (4AC1) specification, Issue 1, October 2016, published by Pearson Education Limited – Topic 3 Introduction to control processes, sections 3 Correction of errors and 4 Bank reconciliation statements, numbered 3.3 and 3.4 here.