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Bank Reconciliation Statement Test 11

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Bank Reconciliation Statement Test 11
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  • Question 1
    1 / -0
    Bank charges amounting to Rs.$$5000$$ was not entered in the cash book. Identify the correct adjustment in cash book .
    Solution
    Bank charges is an expense for the business. It is credited in the cash book when paid as it reduces the balance as per cash book. Thus, bank charges of Rs. 5000 which have not been entered in the cash book will be credited in the cash book.
  • Question 2
    1 / -0
    When debit balance as per cash book is the starting point, direct deposits by customers are __________.
    Solution
    Direct deposits by customers in the bank account leads to increase in the bank balance as per pass book but this entry would be entered in the cash book only after it is updated in the pass book and so the pass book balance would be higher.
    Therefore, when debit balance as per cash book is the starting  point, direct deposits by customers are added to reach the pass book balance 
  • Question 3
    1 / -0
    A bank reconciliation statement is a statement prepared to reconcile________.
    Solution
    Whenever money is deposited in bank  or withdrawn from bank it is recorded in two places.
    • The pass book maintained by the bank
    • The cash book (bank column ) maintained by the account holder.
    These two books are opposites of each other which means if one shows credit balance then the other would reflect a debit balance of the exact same amount. But due to reasons like timing differences the balances of both these books do not match.
     Now, it is not practical and feasible for the bank to reconcile the account balances of each and every account holder so, the account holder prepares a bank reconciliation statement for his account maintained in the bank.
  • Question 4
    1 / -0
    ________ is a statement which is prepared as on a particular date to reconcile the bank balance as per cash book with balance as per pass book by showing all the causes of difference between the two. 
    Solution
    Whenever money is deposited in bank  or withdrawn from bank it is recorded in two places.
    • The pass book maintained by the bank
    • The cash book (bank column ) maintained by the account holder.
    These two books are opposites of each other which means if one shows credit balance then the other would reflect a debit balance of the exact same amount. But due to reasons like timing differences the balances of both these books on a particular date do not match.
     Now, it is not practical and feasible for the bank to reconcile the account balances of each and every account holder so, the account holder prepares a bank reconciliation statement for his account maintained in the bank.
  • Question 5
    1 / -0
    When balance as per cash book is the starting point, bank charges not recorded in cash book are ________.
    Solution
    Bank charges are those service charges which charged by the bank to the account holder for providing the banking services. The amount of such charges is directly debited to the bank account as per the calculation policy of the bank. Since the amount cannot be ascertained by the account holder, it is not recorded in the records maintained by them. Hence, in the reconciliation statement such amount is subtracted to get the closing balance as per bank pass book. 
  • Question 6
    1 / -0
    When balance as per cash book is the starting point, un-collected cheques are ___________.
    Solution
    Uncollected cheques are those which are yet to be deposited by the account holder in the bank , due to which the cash book balance would be higher than the pass book balance.
    So, while preparing the reconciliation statement if cash book is the starting point, uncollected cheques are to be subtracted. 
  • Question 7
    1 / -0
    Overdraft as per pass book of P&Co. was Rs.$$60,000$$.
     -The credit side of bank column of cash book was under cast by Rs.$$200$$.
     -Interest on bank loan Rs.$$4,000$$ and bank charges of Rs.$$1,150$$ were not recorded in cash book.
    Overdraft balance as per cash book should be _________.
    Solution
    The reconciliation is as follows : 
      ParticularsAmount in Rs. 
     Overdraft as per pass book $$60000$$ 
     Less Under casting of the credit side of bank column of the cash book$$200$$ 
    LessInterest on bank loan not recorded in cash book $$4000$$ 
    LessBank charges not recorded in cash book  $$1150$$ 
      Overdraft as per cash book $$54650$$
  • Question 8
    1 / -0
    When balance as per cash book is the starting point, cheques deposited but dishonoured are ____________ .
    Solution
    When cheque is deposited in the bank, the account holder would debit his bank column of the cash book to increase the bank balance, but when the same cheque gets dishonoured his cash book would show higher  balance than his pass book.
    So, while reconciling the bank balances if balance as per cash book is the starting point, cheques deposited but dishonoured are subtracted.
  • Question 9
    1 / -0
    When balance as per cash book is the starting point, cheques issued but not presented for payments are ____________.
    Solution
    In case of cheques issued but not presented for payment, the entry for the same would be entered in the cash book as soon as the cheques are issued by the account holder as a result the cash book balance would be less than the pass book balance.
    So, while preparing reconciliation statement if balance as per cash book is the starting point , cheques issued but not presented for payments are added .
  • Question 10
    1 / -0
    The cash book of N Ltd. showed debit balance of Rs.$$6,000$$. A comparison of pass book and cash book revealed the following
     -Cheques amounting of Rs.$$250$$ has been dishonoured but not recorded in cash book.
     -Total of credit side bank column in cash book was under cast by Rs.$$475$$
    Balance as per pass book will be ________.
    Solution
     Particulars + -
     Balance as per cash book (Dr.) 6,000 
     Cheque dishonoured but not entered in cash book  250
     Amount by which cash book is undercast  475
     Balance as per pass book  5,275
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