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Bank Reconciliation Statement Test 7

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Bank Reconciliation Statement Test 7
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  • Question 1
    1 / -0
    Cash receipt of $$Rs. 5100$$ was wrongly posted to bank column of cash book as $$Rs. 510$$. Bank balance as per cash book will be ________.
    Solution
    Cash receipt is to entered in the cash column of the cash book and no entry of this would be shown in the pass book as the bank balance is not affected due to this transaction. But, here cash receipt of $$Rs. 5100$$ was wrongly posted in bank column of the cash book as $$Rs.510$$ which would result in cash book showing a bank balance more by $$Rs. 510$$ .
  • Question 2
    1 / -0
    Cash receipt of $$Rs. 5100$$ was wrongly posted to credit side bank column of cash book as $$Rs. 510$$. bank balance as per cash book will be ________.
    Solution
    Cash receipt is to entered on the debit side of the cash column in the   cash book and no entry of this would be shown in the pass book as the bank balance is not affected due to this transaction. But, here cash receipt of $$Rs. 5100$$ was wrongly posted on the credit side of the  bank column in the  cash book as $$Rs.510$$. Any entry on the credit side of the bank column in the cash book indicates payment through bank balance, so the error occurred here would lead to the bank balance as per cash  book being less by  $$Rs. 510$$ .
  • Question 3
    1 / -0
    Which of these statements is true about a bank pass book?
    Solution
    The cash book also serves the purpose of both the cash account and the bank account and shows the balance of both at the end of the period. Once the cash book has been balanced, it is usual to check its details with the records of the firm's bank transactions as recorded by the bank. To enable this check, the cashier needs to ensure that the cash book is completely up to date and a recent bank statement (or a bank passbook) has been obtained from the bank. A bank statement or a bank passbook is a copy of a bank account as shown by the bank record. This enables the bank customers to check their funds in the bank regularly and update their own record of transactions that have occurred.
  • Question 4
    1 / -0
    If we take balance as per cash book, _________ will be added to get balance as per pass book.
    Solution
    Entry of interest given by bank would be first entered in the pass book by the bank and only after that the account holder would be able to enter the same in the cash book, so at this given point of time the pass book balance would be higher than cash book . Interest given by the bank is an income to the account holder. So, if the balance as per cash book is the starting point then we would have to add interest given by bank to reach the pass book balance.
  • Question 5
    1 / -0
    The cash book shows a balance of $$Rs. 11,000$$ which was different from the pass book balance. The difference is found to be due to a credit entry in pass book amounting to $$Rs. 2,000$$ for direct payment by a customer and a debit of $$Rs. 250$$ for bank charges on collection of outstation cheques and other services. What would be the balance as per bank pass book?
    Solution
    The reconciliation of cash book and pass book balance is as follows :

     Particulars Amount in Rs. 
     Balance as   per cash book $$11000$$ 
     AddDirect payment by customer $$2000$$ 
    Less Bank Charges $$250$$ 
      Balance as per pass book$$12750$$ 
  • Question 6
    1 / -0
    Which of the following accounts is increased by credit entries?
    Solution
    • Purchase account has a debit balance being an expenditure and any credit entries would lead to decrease in the purchase amount.
    • Goodwill account has a debit balance being an asset  and any credit entries would lead to decrease int he goodwill amount.
    • Sales return account has a debit balance as this account is used to record the items returned in sales. Sales has a credit balance so to reduce it, the sales return entries must be debited and hence sales return has debit balance. Any credit entries to the sales return account would lead to increase in the amount.
    • Bank overdraft has a credit balance as it is a liability, any credit entries would lead to increase in the overdraft amount.
  • Question 7
    1 / -0
    Bank Reconciliation Statement is prepared to ascertain the causes of the difference between ________________ and ______________.
    Solution
    Bank reconciliation statement is an exercise to ascertain the difference between the bank statements and cash book maintained by the business.
    However, any discrepancies in cash column as per the cash book shall not be reflected since only bank column of the cash book is considered vis-a-vis the pass book in preparing Bank reconciliation statement.
  • Question 8
    1 / -0
    A bank reconciliation is a ____________________.
    Solution
    Whenever money is deposited in bank  or withdrawn from bank it is recorded in two places.
    • The passbook 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 9
    1 / -0
    Debit balance as per cash book means _________.
    Solution
    When we say that cash book has a debit balance it means that the debit side of the cash book is more than the credit side. On the debit side we record cash receipts and on the debit side we record cash payments. So if there is a debit balance as per cash book then it means there is cash balance with us.
  • Question 10
    1 / -0
    Credit balance as per bank a/c implies_______.
    Solution
    The bank account maintained by the account holder in his books of accounts is usually an asset for him as balance  shown in the bank account would be a receivable for him from the bank and hence usually shows a debit balance.
    But whenever a reverse situation happens, such that the bank account becomes a liability for him and he has to pay the bank then, his bank account would reflect a credit balance which in other words would become a bank overdraft.

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