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Bank Reconciliation Statement Test 16

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Bank Reconciliation Statement Test 16
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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 correct adjusted cash balance?
    Solution
    In case of deposits in transit the entry for would have been entered in the cash book due to which the cash book balance would be higher than the pass book balance.
    So, while reconciling the ending cash balance as per the bank statement to the correct adjusted cash balance, deposits in transit should be added to the balance as per the bank statement.
  • Question 2
    1 / -0
    In bank reconciliation statement the account of outstanding cheques is added to ____  book balance of cash.
    Solution
    Outstanding cheques are those cheques which have been issued for payment by the business to its suppliers or creditors but have not yet been presented for payment. This means they have been received in the cash book by crediting the cash book. So, in bank reconciliation statement, the account of outstanding cheques is added to adjusted book balance of cash.
  • Question 3
    1 / -0
    Bank balance as per cash book (Dr.) Rs. $$25,450$$. A comparison of pass book and cash book revealed the following:
    - The bank had directly collected dividend of Rs. $$400$$ and interest Rs. $$300$$.
    - As per standing instruction bank had paid bills of Rs. $$2,000$$.
    Balance as per pass book will be ___________ .
    Solution
    The reconciliation is as follows :
      ParticularsAmount in Rs. 
     Bank balance as per cash book (Dr.) $$25450$$ 
     AddDividend directly collected by bank $$400$$ 
     AddInterest directly collected by bank $$300$$ 
     LessBills paid by bank as per standing instruction $$2000$$ 
      Balance as per pass book (Dr.)$$24150$$
  • Question 4
    1 / -0
    A bank reconciliation statement is prepared by.
    Solution
    A bank reconciliation statement is prepared by the one who holds an account in the bank. A bank will never prepare a bank reconciliation statement but only provides with the summary of transactions undertaken by the account holder during a given period in form of a bank pass book.
  • Question 5
    1 / -0
    Bank charges amounting to Rs. $$5,000$$ was not entered in the cash book. Identify the correct adjustment in cash book.
    Solution
    Bank charges are charged by bank to the account holder for the services provided by it. This expense is entered in the pass book on the debit side and should be credited in the cash book.So if the bank charges are not entered in the cash book, it should be credited to the cash book to reconcile the balances of bank as per the cash book and the pass book.
  • Question 6
    1 / -0
    Bank balance as per pass book (CR.) Rs. $$5,090$$. A comparison of pass book and cash book revealed the following:
    - The bank had directly collected dividend of Rs. $$80$$ and interest Rs. $$60$$.
    - As per standing instruction, bank had paid bills of Rs. $$400$$.
    Balance as per cash book will be _____________.
    Solution
    The reconciliation statement is as follows :
      Particulars Amount in Rs.
      Balance as per pass book (Cr.)$$5090$$ 
     LessDividend directly collected by bank $$80$$ 
     LessInterest directly collected by bank $$60$$ 
     AddBills paid as per standing instruction  $$400$$ 
      Balance as per cash book (Dr.)$$5350$$ 
  • Question 7
    1 / -0
    Unfavourable balance as per cash book means which of the following?
    Solution
    The bank column of the cash book is an asset for the account holder and usually reflects a debit balance, which in normal parlance is known as favourable balance.
    But there are bank accounts which allow the account holder to withdraw money more than the available balance, such accounts are known as bank overdraft. These accounts are in the nature of a liability to the account holder and have a credit balance which is also known as unfavourable balance as per cash book. 
  • Question 8
    1 / -0
    When debit balance as per cash book is the starting point, direct deposits by customers are __________ .
    Solution
    In case of direct deposits by customers the entry for the same would have been entered in the pass book due to which the cash book balance would be less than the pass book balance.
    So, when debit balance as per cash book is the starting point, direct deposits by customers are added to reach pass book balance.
  • Question 9
    1 / -0
    Favourable balance as per cash book means which of the following?
    Solution
    Favourable balance in the cash book means positive balance. Such balance is represented by debit balance of the cash book. The cash book is debited when cash comes in and credited when cash goes out. So, when the cash book balance increases, or is positive, it is shown as debit or favourable balance.
  • Question 10
    1 / -0
    Favourable balance as per pass book means which of the following?
    Solution
    Favourable balance as per pass book means credit balance in the passbook. Pass book is a copy of the customer's account in the books of the bank. It is prepared by the bank from the point of view of the bank. So, when we deposit our money into the bank account, we become a liability for the bank. This means that the bank owes us money. So it represents it by showing a credit balance in our passbook.
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