When a bank statement has a negative balance the cash book balance will be as follows:

Question

Quizplus · Accepted Answer

A negative balance in the bank statement indicates an overdraft, meaning the bank account is overdrawn. To reconcile this with the cash book balance, you adjust the bank statement balance by subtracting any unpresented lodgements (since they are not yet reflected in the bank statement but are recorded in the cash book) and adding any unpresented cheques (since they have been recorded in the cash book but not yet processed by the bank). This adjustment reflects the true cash position as per the cash book.

When a Bank Statement Has a Negative Balance the Cash