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Bank Reconciliation Statement Test - 25

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Bank Reconciliation Statement Test - 25
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  • Question 1
    1 / -0
    The difference in the balance of both the cashbook and the passbook can be because of.
    Solution
    Errors can also be made by the bank and hence it is not necessary only the business preparing cash book shall make errors.
    The difference is important to be known between the cash book and pass book to know the errors and frauds during the period in both cash book and pass book.
    If something is omitted to be recorded in both the books, it may not be know since there would not be base to reconcile.
  • Question 2
    1 / -0
    Unfavourable balance as per cash book means which of the following?
    Solution
    The bank column of the cash book is an asset for the account holder and usually reflects a debit balance, which in normal parlance is known as favourable balance.
    But there are bank accounts which allow the account holder to withdraw money more than the available balance, such accounts are known as bank overdraft. These accounts are in the nature of a liability to the account holder and have a credit balance which is also known as unfavourable balance as per cash book. 
  • Question 3
    1 / -0
    Entry on the debit side of pass book implies.
    Solution
    'Withdrawal' is money withdrawn by the business from the bank account from the available balance.
    Debit side is 'Withdrawal' and credit side is 'Deposit' as per the bank statement/ bank pass book.
    A debit entry in bank pass book is a credit entry in the cash book of the business and vice versa.
  • Question 4
    1 / -0
    Which of the following is/are cause of difference of balance between cash book & the pass book?
    Solution
    Of the given options, event of  dis-honoured cheques and discounting of bill is reflected in the pass book first and not in the cash book since it is dependent on happening of an event.
    In case of option (a), the cheque so deposited is first recorded in the cash book and then reflected in bank pass book, in case of option (c), cheques received are first recorded in cash book after which they are deposited into the bank, for which the bank has collected an amount initially, all theses are recorded in cash book after which they are reflected on clearance in the bank pass book.
  • Question 5
    1 / -0
    Favourable balance as per cash book means which of the following?
    Solution
    Favourable balance in the cash book means positive balance. Such balance is represented by debit balance of the cash book. The cash book is debited when cash comes in and credited when cash goes out. So, when the cash book balance increases, or is positive, it is shown as debit or favourable balance.
  • Question 6
    1 / -0
    Favourable balance as per pass book means which of the following?
    Solution
    Favourable balance as per pass book means credit balance in the passbook. Pass book is a copy of the customer's account in the books of the bank. It is prepared by the bank from the point of view of the bank. So, when we deposit our money into the bank account, we become a liability for the bank. This means that the bank owes us money. So it represents it by showing a credit balance in our passbook.
  • Question 7
    1 / -0
    If the cheque is not presented for the payment up to the date of the preparation of the Bank Reconciliation Statement then the balance as per pass book will be ___________ .
    Solution
    In case of cheque issued but not presented for payment, the entry for the same would have been entered in the cash book and so the cash book balance will be less than the pass book balance as the same would still not be entered in the pass book.
    This is because the bank would record the entry for payment only when the cheque is presented for payment.
    And so if the cheque is not presented for the payment up to the date of the preparation of the bank reconciliation statement then the balance as per pass book will be higher than the balance shown by the cash book by the amount of unpresented cheque.
  • Question 8
    1 / -0
    Unfavourable balance as per pass book means which of the following?
    Solution
    Unfavourable balance as per pass book means debit balance or overdraft in the passbook. Passbook is a copy of the customer's account with the bank. It is prepared by the bank with the point of view of the bank. When we take a loan from the bank, we become debtor (asset) for the bank. So, the bank represents it by showing a debit balance overdraft balance in our passbook.
  • Question 9
    1 / -0
    Which of the following is/are cause of difference of balance between cash book & the pass book?
    Solution
    If anything is left to be entered in the cash book (incomplete recording) , it might not show a true picture and will not lead to tallying of both the books.
    Direct transactions of payment or collection are also not reflected in the cash book first but in the bank pass book and hence it would also not lead to tallying of both the books.
  • Question 10
    1 / -0
    Bank balance as per cash book (Dr.) Rs. $$25,450$$. A comparison of pass book and cash book revealed the following:
    - The bank had directly collected dividend of Rs. $$400$$ and interest Rs. $$300$$.
    - As per standing instruction bank had paid bills of Rs. $$2,000$$.
    Balance as per pass book will be ___________ .
    Solution
    The reconciliation is as follows :
      ParticularsAmount in Rs. 
     Bank balance as per cash book (Dr.) $$25450$$ 
     AddDividend directly collected by bank $$400$$ 
     AddInterest directly collected by bank $$300$$ 
     LessBills paid by bank as per standing instruction $$2000$$ 
      Balance as per pass book (Dr.)$$24150$$
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