Bank Reconciliation Statement Test

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Bank Reconciliation Statement Test - 22

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Weekly Quiz Competition

Question 1

1 / -0

The pass book of N Ltd. showed credit balance of Rs.$$9,000$$. A comparison of pass book and cash book revealed the following:
-Cheques amounting to Rs.$$375$$ has been dishonoured but not recorded in cash book.
-Total of credit column of cash was under cast by Rs.$$712.50$$.
Balance as per cash book will be ________.

Rs.$$9,337.50$$

Rs.$$8,662.50$$

Rs.$$10,087.50$$

Rs.$$7,912.50$$

Solution

Particulars	+	-
Balance as per pass book (Cr.)	9,000
Cheques dishonoured but not entered in cash book	375
Amount by which credit side of cash book is undercast	712.50
Balance as per cash book	10,087.50

Question 2
1 / -0

When a cheque is deposited ____________ .

A
bank pass book will be credited

B
bank pass book will be debited

C
bank column in cash book is debited

D
bank column in cash book is credited

Solution

The journal entry in the books of the account holder when a cheque is deposited is as follows :
Bank A/c. ................................Dr.
To Receivable A/c.
So, as seen from above entry the bank column in the cash book would be debited when a cheque is deposited. Until The Cheque gets cleared, No entry is made by bank in pass book. Generally, it takes 2-3 days in clearance of cheque. So, as soon as cheque is deposited, Bank column in cash book is debited.
Question 3
1 / -0

Some of the transaction that is dependent on bank statement are ____________.

A
collection charges

B
dividends received

C
pre-scheduled payments

D
all of the above
Solution
- Collection charges are directly charged by the bank for providing specified services and this amount is charged completely on the discretion of the bank. This amount can be recorded in the books of accounts only when we have the bank statement and not before that.
- In case of date of declaration of dividend and the date of actual receipt of it there would a difference so we need the bank statement for the actual date of receipt.
- Pre-scheduled payments are the expense bills to be paid or subscription to be paid on timely intervals. They are scheduled as per the account holders and are therefore executed by the bank automatically. To record such transactions bank statement/pass book is necessary.
Question 4
1 / -0

The purpose of preparing a bank reconciliation statement is to ____________.

A
Ascertain that the difference between the cash book balance and the bank statement balance has been accounted for

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 in the cash book of the firm

Solution

The purpose of preparing a bank reconciliation statement is to amend the balance of the bank statement of the firm.Such amendment is required because of various errors of omissions, casting errors and timing differences arising during accounting the bank transactions.
bank reconciliation statement is the only way to solve these errors and reflect a proper bank balance.

Question 5

1 / -0

Overdraft as per pass book of P&Co. was Rs.$$60,000$$.
-The credit side of bank column of cash book was under cast by Rs.$$200$$.
-Interest on bank loan Rs.$$4,000$$ and bank charges of Rs.$$1,150$$ were not recorded in cash book.
Overdraft balance as per cash book should be _________.

Rs.$$65,350$$

Rs.$$54,650$$

Rs.$$57,350$$

Rs.$$56,950$$

Solution

The reconciliation is as follows :

	Particulars	Amount in Rs.
	Overdraft as per pass book	$$60000$$
Less	Under casting of the credit side of bank column of the cash book	$$200$$
Less	Interest on bank loan not recorded in cash book	$$4000$$
Less	Bank charges not recorded in cash book	$$1150$$
	Overdraft as per cash book	$$54650$$

Question 6
1 / -0

Bank reconciliation statement points out __________.

A
credibility of the balance shown in pass book.

B
savings account

C
fixed deposit account

D
recurring deposit account.

Solution

A bank reconciliation statement is prepared to identify the causes of differences between the balance as per cash book (bank column) and the balance as per pass book (bank statement). It is prepared by taking one balance as the starting point, accommodating all the causes of differences and finally arriving at the other balance. Thus, if a person is able to arrive at the other balance correctly, it can be said that such bank reconciliation statement points out the credibility of the balance shown in the pass book.
Question 7
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 per the bank statement to the adjusted cash balance.

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

C
Both a and b

D
None of the above.

Solution

Bank statement provided by the bank shows the balance as on date.Hence, bank column of cash book might not reflect all the entries as shown in bank pass book since some entries only reflect in bank pass book.Adjustments are made in business's cash book to arrive at the final balance available with the business.
Question 8
1 / -0

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

A
Credit balance in pass book.

B
Debit balance in pass book.

C
Bank overdraft.

D
None 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.
When the deposits are more than the withdrawals, it will show a favourable balance as the credit is more than debit. Therefore, a credit balance is known as a favorable balance of the pass book.
Question 9
1 / -0

An enterprise take cash book balance as the base for preparation of bank reconciliation statement. Some of the bank charges have been put. These charges will be ___________.

A
added in cash book

B
deducted in cash book

C
nothing is to be done for this entry

D
none of the above

Solution

Bank charges are charged by the bank for providing its various services.
It is generally first recorded in the pass book (bank statement) and then taken into account in the cash book by the accountant. While preparing the bank reconciliation statement taking cash book as the base, such bank charges will be deducted in the cash book because it has not been recorded in the cash book yet. To reach to the balance as per pass book (bank statement) correctly, we will have to take into consideration all such causes of differences which have not been taken into account in the cash book.
Question 10
1 / -0

The proper treatment of outstanding cheques on a bank reconciliation when balance as per cash book is the starting point is __________ .

A
Addition

B
Deduction

C
Ignore

D
None of the above

Solution

In case of outstanding cheques the entry would have been entered in the cash book and so the cash book balance would be lower than the pass book balance.
Therefore, while preparing a bank reconciliation statement when the cash book balance is the starting point, outstanding cheques should be added.

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Bank Reconciliation Statement Test - 22

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Bank Reconciliation Statement Test - 22

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Question 1

Rs.$$9,337.50$$

Rs.$$8,662.50$$

Rs.$$10,087.50$$

Rs.$$7,912.50$$

Solution

Question 2

bank pass book will be credited

bank pass book will be debited

bank column in cash book is debited

bank column in cash book is credited

Solution

Question 3

collection charges

dividends received

pre-scheduled payments

all of the above

Solution

Question 4

Ascertain that the difference between the cash book balance and the bank statement balance has been accounted for

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 in the cash book of the firm

Solution

Question 5

Rs.$$65,350$$

Rs.$$54,650$$

Rs.$$57,350$$

Rs.$$56,950$$

Solution

Question 6

credibility of the balance shown in pass book.

savings account

fixed deposit account

recurring deposit account.

Solution

Question 7

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

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

Both a and b

None of the above.

Solution

Question 8

Credit balance in pass book.

Debit balance in pass book.

Bank overdraft.

None of the above.

Solution

Question 9

added in cash book

deducted in cash book

nothing is to be done for this entry

none of the above

Solution

Question 10

Addition

Deduction

Ignore

None of the above

Solution

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