Bank Reconciliation Statement Test 14

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Bank Reconciliation Statement Test 14

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Question 1
1 / -0

How would deposits in transit be handled when reconciling the ending cash balance as per the bank statement to the bank balance as per cash book?

A
Added to the balance as per the bank statement.

B
Subtracted from the balance as per the bank statement

C
Added to the balance as per company records.

D
Ignored.

Solution

In case of deposits in transit the entry would have been entered in the cash book and so the cash book balance would be higher than the bank statement balance
Therefore, while preparing a bank reconciliation statement if balance as per bank statement is the starting point, deposits in transit are added.
Question 2
1 / -0

Bank reconciliation statement is prepared by _________.

A
Accountant of the business

B
Manager of the business

C
Controller of the bank

D
Accountant of the bank

Solution

A bank reconciliation statement is prepared to reconcile the balnaces as per cash book (bank column) with the balances as per pass book (bank statement).
It is done by the accountant of the business as it is the business which needs to find the causes of differences between the two balances in order to present a true and fair view of it's financial statements and books of accounts to it's various stakeholders.
Question 3
1 / -0

The purpose of preparing a Bank Reconciliation Statement is to ___________.

A
Ascertain the difference between the pass book balance and the bank statement balance

B
Correct errors in the cash book or errors in the bank statement

C
Amend the balance of the bank statement of the firm

D
Amend the balance of the cash book of the firm

Solution

A bank reconciliation statement is a vital statement for the business.
It is prepared to reconcile the balance as per the bank pass book and the bank column of cash book. The balance as per bank column of cash book of the business does not contain all the entries and hence with the help of bank statement provided by the bank, all the errors are rectified. This gives a true picture of the balance available with the business.
Question 4
1 / -0

Bank reconciliation sometimes points to the need for adjusting entries. Invariably how should it be done?

A
The reconciliation of the ending balance as per the bank statement to the adjusted cash balance.

B
The reconciliation of the cash balance as per the company records to the adjusted cash balance.

C
Both a and b

D
None of the above

Solution

Bank statement provides balance as on date. But to determine the exact balance available with the business, it is required for business to prepare bank reconciliation statement while making adjustments in the bank column of cash book.
Question 5
1 / -0

The proper treatment on the bank reconciliation of an NSF cheque of a customer that is returned with the bank statement is to show it as a(an) _________.

A
addition per book balance of cash

B
deduction per book balance of cash

C
addition per bank statement balance

D
deduction per bank statement balance

Solution

A cheque is marked as 'NSF' when it is issued by the business to a supplier or creditors, but there are 'Not sufficient funds' in the bank account to make the payment. So, the proper treatment on bank reconciliation of an NSF cheque that is returned with the bank statement is to show it as a deduction per book balance of cash as it was added before when it was received for payment from the customer.
Question 6
1 / -0

A discount of Rs 2000 was given to a supplier on his prompt repayment of debt but the cashier did not enter in the cash book. What should be the adjustment in cash to work out the correct balance of cash book?

A
Rs 2000 will be debited in cash book

B
Rs 2000 will be credited in cash book

C
Rs 4000 will be debited in cash book

D
Rs 4000 will be credited in the cash book

Solution

A discount of Rs. 2000 given to the supplier on his prompt repayment of debt will reduce the amount of cash that the business will receive by Rs. 2000. A reduction in cash received is equivalent to the situation when cash goes out. So, Rs. 2000 will be credited in cash book as cash book is debited when cash comes in and credited when cash goes out.
Question 7
1 / -0

Bank reconciliation statement is prepared on________________.

A
yearly basis from Jan to December

B
certain period basis

C
as on particular date

D
both a & b

Solution

Bank reconciliation statement is a statement prepared by the business to reconcile the differences between the balances as per cash book and pass book on periodic basis. Generally it is done on monthly basis when the business receives the bank statement. It may also be prepared on yearly basis from January to December or some other certain period basis.
Question 8
1 / -0

Base of reconciliation statement is_______________.

A
Balance shown in Cash Book

B
Balance shown in Pass Book

C
Either A or B

D
Neither A nor B

Solution

Base of a reconciliation statement can either be as per cash book or bank pass book since balances of both the books are considered to know the final balance available with the business.
Bank reconciliation statement consists of all the adjustments along with the transactions recorded in bank pass book and cash book.
Question 9
1 / -0

The proper treatment on the bank reconciliation of a debit memorandum issued by the bank is to show it as an __________.

A
addition per book balance of cash

B
deduction per book balance of cash

C
addition per bank statement balance

D
deduction per bank statement balance

Solution

A debit memorandum or a debit memo is given by the bank to the customer to imply that the passbook balance has been reduced for reasons other than withdrawals. So, the proper treatment on the bank reconciliation of a debit memorandum is to show it as a deduction for book balance of cash.
Question 10
1 / -0

Bank sent debit advice of Rs 500 to company on overdraft. It wasn't entered in cash book. What will be the adjustment in cash book.

A
Rs 500 will be debited

B
Rs 500 will be credited

C
Nonadjustable

D
Rs 1000 will be subtracted

Solution

A debit advice refers to an advice or a statement sent by bank to the account holder to notify him of the charges of the bank, it is similar to bank charges charged by bank. In the present case this charge of $$Rs. 500$$ would be already charged by the bank and so the overdraft balance would have increased.
So, to adjust the same in the cash book $$Rs. 500$$ will be credited.

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Re-Attempt Weekly Quiz Competition

Bank Reconciliation Statement Test 14

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Bank Reconciliation Statement Test 14

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Rank

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SHARING IS CARING

Question 1

Added to the balance as per the bank statement.

Subtracted from the balance as per the bank statement

Added to the balance as per company records.

Ignored.

Solution

Question 2

Accountant of the business

Manager of the business

Controller of the bank

Accountant of the bank

Solution

Question 3

Ascertain the difference between the pass book balance and the bank statement balance

Correct errors in the cash book or errors in the bank statement

Amend the balance of the bank statement of the firm

Amend the balance of the cash book of the firm

Solution

Question 4

The reconciliation of the ending balance as per the bank statement to the adjusted cash balance.

The reconciliation of the cash balance as per the company records to the adjusted cash balance.

Both a and b

None of the above

Solution

Question 5

addition per book balance of cash

deduction per book balance of cash

addition per bank statement balance

deduction per bank statement balance

Solution

Question 6

Rs 2000 will be debited in cash book

Rs 2000 will be credited in cash book

Rs 4000 will be debited in cash book

Rs 4000 will be credited in the cash book

Solution

Question 7

yearly basis from Jan to December

certain period basis

as on particular date

both a & b

Solution

Question 8

Balance shown in Cash Book

Balance shown in Pass Book

Either A or B

Neither A nor B

Solution

Question 9

addition per book balance of cash

deduction per book balance of cash

addition per bank statement balance

deduction per bank statement balance

Solution

Question 10

Rs 500 will be debited

Rs 500 will be credited

Nonadjustable

Rs 1000 will be subtracted

Solution

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