Bank Reconciliation Statement Test

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Bank Reconciliation Statement Test - 24

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Weekly Quiz Competition

Question 1
1 / -0

The proper treatment on the bank reconciliation of a note collected by the bank for the depositor is to show it as an _________.

A
addition to the balance as per cash book

B
deduction from the balance as per cash book

C
deduction from the balance as per pass book

D
addition to the balance as per pass book

Solution

In case when the bank collects a note for the depositor the entry for the same would have been entered in the bank statement and so the cash book balance would be less than the bank statement balance.
Therefore, the proper treatment on the bank reconciliation of a note collected by the bank for the depositor is to show it as an addition to the balance as per cash book.
Question 2
1 / -0

The proper treatment of unrecorded deposits (deposits in transit) on a bank reconciliation is to show them as an _______________.

A
Addition per book balance of cash

B
Deduction per book balance of cash

C
Addition per bank statement balance

D
Deduction per bank statement balance

Solution

Unrecorded deposits (deposits in transit) are those deposits which have been recorded in the cash book but not in the passbook resulting in increasing the balance as per cash book as the cash book has been debited. So, the proper treatment of unrecorded deposits (deposit in transit) on bank reconciliation is to show them as an addition per bank statement/ passbook balance in order to reconcile the two balances.
Question 3
1 / -0

Bank reconciliation statement is prepared on________________.

A
yearly basis from Jan to December

B
certain period basis

C
as on particular date

D
both a & b

Solution

Bank reconciliation statement is a statement prepared by the business to reconcile the differences between the balances as per cash book and pass book on periodic basis. Generally it is done on monthly basis when the business receives the bank statement. It may also be prepared on yearly basis from January to December or some other certain period basis.
Question 4
1 / -0

Base of reconciliation statement is_______________.

A
Balance shown in Cash Book

B
Balance shown in Pass Book

C
Either A or B

D
Neither A nor B

Solution

Base of a reconciliation statement can either be as per cash book or bank pass book since balances of both the books are considered to know the final balance available with the business.
Bank reconciliation statement consists of all the adjustments along with the transactions recorded in bank pass book and cash book.
Question 5
1 / -0

The proper treatment on the bank reconciliation of a debit memorandum issued by the bank is to show it as a/an __________.

A
Addition to book balance of cash

B
Deduction from book balance of cash

C
Addition to bank statement balance

D
Deduction from bank statement balance

Solution

A debit memorandum is issued by a bank with respect to any charges payable to it by the account holder, the entry for the same would be already passed by the bank and so the bank statement balance would be less than the cash book balance.
Therefore, the proper treatment on the bank reconciliation of a debit memorandum issued by the bank is to show it as a deduction from the book balance of cash.
Question 6
1 / -0

Bank reconciliation statement points out _______________.

A
credibility of the balance shown in pass book

B
saving account

C
fixed deposit account

D
recurring deposit account

Solution

A bank reconciliation statement is prepared using cash book which is prepared by the business and passbook which is prepared by the bank. When the balances of these two books are compared and reconciled, the credibility of the balances is established. Since the business prepares the cash book and the bank reconciliation statement and the passbook is prepared by the bank, the business is able to establish the credibility of the balance as per pass book which is not prepared by the business, on the basis of cash book while preparing bank reconciliation statement, which are prepared by it.
Question 7
1 / -0

In case of an enterprise having an overdraft facility the bank reconciliation statement treats all the cheques deposited but not cleared in the cash book to be __________.

A
added

B
deducted

C
to be revealed only in pass book

D
to be revealed only in cash book

Solution

Overdraft facility means that the customer is allowed to withdraw money from his bank account even when the balance is zero. However, this does not affect the way in which the cheques deposited but not cleared are recorded in the cash book. Cheques deposited but not cleared are debited in the cash book (bank column). Thus, even in the case of an enterprise having overdraft facility, the bank reconciliation statement treats all the cheques deposited but not cleared as added.
Question 8
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?

A
Added to the balance as per the bank statement.

B
Subtracted from the balance as per the bank statement.

C
Added to the balance as per company records.

D
Ignored.

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 9
1 / -0

In bank reconciliation statement the account of outstanding cheques is added to ____ book balance of cash.

A
Adjusted

B
Unadjusted

C
Understand

D
Overstated

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 10
1 / -0

Which of the following is true about bank reconciliation statement -

A
Bank reconciliation statement need not to be prepared where the balance of cash book and pass book matches.

B
Bank reconciliation statement is to be prepared necessarily as per the Income tax Act, 1961.

C
Bank reconciliation statement is prepared on yearly basis

D
Bank reconciliation statement is to be prepared and supplied by bank.

Solution

A bank reconciliation statement is prepared to reconcile the differences between the balance as per cash book (bank column) and balance as per pass book (bank statement by identifying the causes of differences between the two. So, in the case where the balance of cash book and pass book matches, it need not be prepared. Also, it is not required to be prepared by any act or the bank. It is prepared by the business (accountant) as per the time period it deems fit.

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Re-Attempt Weekly Quiz Competition

Bank Reconciliation Statement Test - 24

Result

Bank Reconciliation Statement Test - 24

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SHARING IS CARING

Question 1

addition to the balance as per cash book

deduction from the balance as per cash book

deduction from the balance as per pass book

addition to the balance as per pass book

Solution

Question 2

Addition per book balance of cash

Deduction per book balance of cash

Addition per bank statement balance

Deduction per bank statement balance

Solution

Question 3

yearly basis from Jan to December

certain period basis

as on particular date

both a & b

Solution

Question 4

Balance shown in Cash Book

Balance shown in Pass Book

Either A or B

Neither A nor B

Solution

Question 5

Addition to book balance of cash

Deduction from book balance of cash

Addition to bank statement balance

Deduction from bank statement balance

Solution

Question 6

credibility of the balance shown in pass book

saving account

fixed deposit account

recurring deposit account

Solution

Question 7

added

deducted

to be revealed only in pass book

to be revealed only in cash book

Solution

Question 8

Added to the balance as per the bank statement.

Subtracted from the balance as per the bank statement.

Added to the balance as per company records.

Ignored.

Solution

Question 9

Adjusted

Unadjusted

Understand

Overstated

Solution

Question 10

Bank reconciliation statement need not to be prepared where the balance of cash book and pass book matches.

Bank reconciliation statement is to be prepared necessarily as per the Income tax Act, 1961.

Bank reconciliation statement is prepared on yearly basis

Bank reconciliation statement is to be prepared and supplied by bank.

Solution

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