Bank Reconciliation Statement Test

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Bank Reconciliation Statement Test - 20

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Question 1
1 / -0

Favourable balance as per cash book means which of the following?

A
Cr. balance in cash book.

B
Dr. balance in cash book.

C
Bank overdraft.

D
Dr. balance in pass book.

Solution

The cash book is a account statement as maintained by the account holder. So if the cash book reflects a debit balance it means that the account is in the nature of a debtor/receivable for the account holder.
The debit side of the cash book indicates receipts whereas the debit side indicates payments/withdrawals. A favourable balance in this case would be where the receipts are more than the payments so as to say when the cash book shows a debit balance.
Question 2
1 / -0

A Bank Reconciliation Statement is prepared by __________.

A
Creditors

B
Debtors

C
Bank

D
Account Holder
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Whenever money is deposited in bank or withdrawn from bank it is recorded in two places.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 3
1 / -0

Which of the following is not the salient features of bank reconciliation statement?

A
Reconciliation is done by the bankers.

B
Reconciliation statement will help in finding the person doing any fraud.

C
Any undue delay in the clearance of cheques will be shown up by the reconciliation.

D
All of above.

Solution

Bank reconciliation statement is a statement prepared by the bank account holder on a particular day to reconcile the bank balance as per cash book with the balance as per passbook showing entries causing the difference between the two balances.
Following are the features of bank reconciliation statement:
1. It is prepared by the customer i.e., holder of the account.
2.It contains a complete and satisfactory explanation of the difference in balance as per the cash book and passbook.
3.Normally it is prepared on closing date of accounts.
4.It is neither journal nor ledger.
Question 4
1 / -0

A bank reconciliation statement is a _________.

A
part of cash book

B
part of financial statements

C
part of pass book

D
none of the above

Solution

A Bank Reconciliation Statement is an independent statement prepared to reconcile the balance between the bank column of cash book and pass book.
It is neither a part of cash book nor pass book.
A Cash flow statement may be a part of financial statement but not Bank Reconciliation Statement.
Question 5
1 / -0

Which of the following is/are cause of difference of balnce between cash book & the pass book?

A
Cheques deposited into bank and collected by bank.

B
Dishonour of cheques/bill discounted.

C
Cheques received and entered in the cash book deposited into the bank on which bank has collected the amount.

D
All of the above.

Solution

Amount deposited into bank is recorded in the bank column of cash book on the debit side while withdrawals are recorded on the credit side.
Bank also maintains an account of the account holder in its books of accounts. Deposits by the account holder are recorded on the credit side of the account holder's account and withdrawals are recorded on the debit side of the account holder's account.
Balances of cash book and pass book must be same but in cases balances of cashbook and passbook may vary.
One such reason for the difference is dishonor of cheques or bill discounted.
In this case passbook shows less balance as compared to cashbook as the bank immediately records such transaction whereas recording in the cash book takes place only on receiving an intimation of the same from the bank.
Question 6
1 / -0

Which of the following is/are significance of Bank Reconciliation Statement?

A
It highlights the causes of difference between the bank balance as per cash book and the balance as per pass book.

B
It helps in finding out actual position of the bank balance.

C
It reduces the chance of fraud by the staff dealing in cash.

D
All of the above.

Solution

Bank reconciliation statement- It is a statement prepared on a particular day to reconcile the bank balance as per cash book with the balance as per passbook showing entries causing the difference between the two balances.
Following are the significance of Bank reconciliation statement:
1. Bank reconciliation statement helps in ensuring the accuracy of the balances shown by the cash book and pass book.
2. Bank reconciliation statement helps in identifying the missing transactions which are not yet recorded.
3. Bank reconciliation statement helps in updating the cash books of the company.
4. Bank reconciliation statement helps in verifying the accounts as most companies use double-entry bookkeeping facility.
5. Bank reconciliation statement helps in pointing out the mistakes in cash book and passbook.
Question 7
1 / -0

A bank reconciliation statement is prepared by _________.

A
the bank

B
the bank account holder

C
the government

D
all of the above
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 8
1 / -0

Which of the following is/are cause of difference of balance between cash book & the pass book?

A
Errors committed in recording transactions by the firm.

B
Errors committed in recording transactions by the bank.

C
Natural calamities.

D
Both (A) & (B).

Solution

Banks do commit errors that can cause a difference in balance as per the cash book and the pass book.
Only to reconcile these balances does the businessmen prepare Bank reconciliation.
Majority of the time, there are chances that the fraud and error may be committed by the firm but not always.
Banks may commit errors like printing errors or charging an incorrect bank expense, etc.
Question 9
1 / -0

Which of the following is/are cause of difference of balance between cash book & the pass book?

A
Interest and dividend received by the bank and entered in cash book.

B
Amount directly deposited in the bank account by customer recorded in cash book.

C
Bank charges not entered in the cash book.

D
All of the above.

Solution

Bank reconciliation statement- It is a statement prepared on a particular day to reconcile the bank balance as per cash book with the balance as per passbook showing entries causing the difference between the two balances
Difference may arise in cashbook and passbook due to following reasons:
1. Difference due to timing.
2.Transaction recorded by the bank.
3.Errors committed by bank or customer.
One such type of error committed by customer is that he had not recorded bank charges in his cash book.
Question 10
1 / -0

When debit balance as per cash book is the starting point, direct deposits by customers are __________.

A
added

B
subtracted

C
not required to the adjusted

D
none of these

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

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Bank Reconciliation Statement Test - 20

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Bank Reconciliation Statement Test - 20

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Question 1

Cr. balance in cash book.

Dr. balance in cash book.

Bank overdraft.

Dr. balance in pass book.

Solution

Question 2

Creditors

Debtors

Bank

Account Holder

Solution

Question 3

Reconciliation is done by the bankers.

Reconciliation statement will help in finding the person doing any fraud.

Any undue delay in the clearance of cheques will be shown up by the reconciliation.

All of above.

Solution

Question 4

part of cash book

part of financial statements

part of pass book

none of the above

Solution

Question 5

Cheques deposited into bank and collected by bank.

Dishonour of cheques/bill discounted.

Cheques received and entered in the cash book deposited into the bank on which bank has collected the amount.

All of the above.

Solution

Question 6

It highlights the causes of difference between the bank balance as per cash book and the balance as per pass book.

It helps in finding out actual position of the bank balance.

It reduces the chance of fraud by the staff dealing in cash.

All of the above.

Solution

Question 7

the bank

the bank account holder

the government

all of the above

Solution

Question 8

Errors committed in recording transactions by the firm.

Errors committed in recording transactions by the bank.

Natural calamities.

Both (A) & (B).

Solution

Question 9

Interest and dividend received by the bank and entered in cash book.

Amount directly deposited in the bank account by customer recorded in cash book.

Bank charges not entered in the cash book.

All of the above.

Solution

Question 10

added

subtracted

not required to the adjusted

none of these

Solution

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