Bank Reconciliation Statement Test

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Bank Reconciliation Statement Test - 11

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Weekly Quiz Competition

Question 1
1 / -0

The credit balance as per the cash book indicates _________.

A
Cash balance

B
Bank overdraft

C
Bank balance

D
None of the above

Solution

The cash book is debited when cash is added and credited when it is reduces. Thus, a credit balance in cash book shows reduction in the cash balance to the extent that the final cash balance is negative. This happens when there is an overdraft i.e. we have taken a loan from the bank.
Question 2
1 / -0
Debit balance in the Pass Book means ______________.
A
Favourable balance in the Cash Book

B
Unfavourable balance in the Cash Book

C
Favourable balance in the Pass Book

D
Unfavourable balance in the Pass Book

Solution

A pass book is a copy of the customer's account with the bank in books of the bank. So a debit balance in the pass book means that we owe money to the bank. This is an unfavorable balance. On the other hand, credit balance in the pass book represents the money that the bank owes to us, which is a favourable balance.
Question 3
1 / -0
A Bank Reconciliation Statement is prepared with the help of _____________.
A
Cash Book

B
Pass Book

C
Either Cash Book or Pass Book

D
Neither Cash Book or Pass Book

Solution

A bank reconciliation statement is prepared to reconcile the differences between the balances as per cash book (bank balance) and pass book (bank statement). It is prepared by taking any of the two balances as the base, accommodating all the causes of differences and finally arriving at the other balance. Thus it is prepared with the help of either cash book or pass book depending on whose balance we take as the base.
Question 4
1 / -0

From following which is the way to prepare Bank Reconciliation Statement.

A
Without adjusting cash book balance.

B
Before adjusting cash book balance.

C
Both of the above

D
None of the above

Solution

A bank reconciliation statement is prepared to reconcile the differences between the balances as per cash book (bank column) and pass book (bank statement). It is prepared by taking the balance of the cash book without adjusting it as adjusting it will make both the balances match. In such a case bank reconciliation statement will not be required.
Question 5
1 / -0

Pass book is a/an ____________of account holder's transaction with the bank.

A
Extract

B
Estimate

C
Balance

D
Model

Solution

A bank maintains records of thousands of customers in its ledgers.
However, a pass book is an extract of all the transactions undertaken by a particular account holder through the bank account maintained by the account holder with the bank. These are the confidential details of a particular account which are provided only to the respective account holder.
Question 6
1 / -0

Statement showing the causes of disagreement between the balance of cash book & pass book is known as _____________.

A
Bank Reconciliation Statement

B
Statement of Balance sheet

C
Statement of profit & loss

D
All of the above

Solution

Bank reconciliation statement is a statement prepared by the account holder on a particular date to reconcile the bank balance as per cash book with the balance as per bank pass book or bank statement showing entries causing differences between the two balances.
Bank reconciliation statement is prepared due to following reason:
1. It brings to light errors that may have committed either in the cash bookn or pass book.
2. Undue delay in the clearance of cheques deposited is known from the reconciliation.
3. Reconciliation helps the management to verify the accuracy of entries recorded in the cash book.
4. It shows actual bank balance.
Question 7
1 / -0

How many ways are there to prepare Bank Reconciliation Statement?

A
Three

B
Two

C
One

D
Five
Solution
There are three(3) ways to prepare the bank reconciliation namely:
1. Take the book balance and reconcile it to the bank balance
2. Take the bank balance and reconcile it to the book balance
3. Take the book balance and reconcile it to an adjusted cash balance, then take the bank balance and reconcile it to the adjusted cash balance
Question 8
1 / -0

When cheque deposited by the firm is dishonoured & entry is not made what is the effect on Cash book?

A
The balance as per the passbook would be less than the cash book balance.

B
The balance as per the cash book would be less than the pass book balance.

C
The balance as per the passbook would be equals to the cash book balance.

D
None of the above.

Solution

When an amount is deposited either cash or cheque in the bank, we have to debit the bank column of cash book and in correspondence to that bank credit our A/c when cash or cheque is deposited in the bank.
In case of cheque gets dishonoured bank immediately debits our A/c which is maintained in the bank's A/c book which results in less balance as per passbook than cashbook balance as the same is not recorded in the cash book.
Question 9
1 / -0
When the balance as per Cash Book is the starting point, direct deposit by customer is__________.
A
Added

B
Subtracted

C
Not required to be adjusted

D
Neither of the two

Solution

A direct deposit is a deposit which is directly made into the bank account without recording it in the cash book. So the balance as per pass book increases as compared to the balance as per cash book. Thus, when balance as per cash book is the starting point, a direct deposit is added to arrive at the balance as per pass book.
Question 10
1 / -0

When money is withdrawn from the bank, the bank_________the account of the customer.

A
Credit

B
Debit

C
Give no effect

D
Make addition to

Solution

Money kept in Bank account is an asset for us but it is a liability for the bank. Hence, for the bank, any decrease needs to be debited and any increase needs to be credited. When the money is withdrawn from the bank account, the business credits it because there is a decrease in the asset.
But, the bank will debit it because it is a decrease in their liability.
Thus, the correct option is B.

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Re-Attempt Weekly Quiz Competition

Bank Reconciliation Statement Test - 11

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Bank Reconciliation Statement Test - 11

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SHARING IS CARING

Question 1

Cash balance

Bank overdraft

Bank balance

None of the above

Solution

Question 2

Favourable balance in the Cash Book

Unfavourable balance in the Cash Book

Favourable balance in the Pass Book

Unfavourable balance in the Pass Book

Solution

Question 3

Cash Book

Pass Book

Either Cash Book or Pass Book

Neither Cash Book or Pass Book

Solution

Question 4

Without adjusting cash book balance.

Before adjusting cash book balance.

Both of the above

None of the above

Solution

Question 5

Extract

Estimate

Balance

Model

Solution

Question 6

Bank Reconciliation Statement

Statement of Balance sheet

Statement of profit & loss

All of the above

Solution

Question 7

Three

Two

One

Five

Solution

Question 8

The balance as per the passbook would be less than the cash book balance.

The balance as per the cash book would be less than the pass book balance.

The balance as per the passbook would be equals to the cash book balance.

None of the above.

Solution

Question 9

Added

Subtracted

Not required to be adjusted

Neither of the two

Solution

Question 10

Credit

Debit

Give no effect

Make addition to

Solution

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