Bank Reconciliation Statement

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Reconciliation Quizzes & Trivia

Questions and Answers
  • 1. 

    A Bank Reconciliation Statement is prepared to know the causes for the difference between:

    • A.

      The balances as per cash column of Cash Book and the Pass Book.

    • B.

      The balance as per bank column of Cash Book and the Pass Book

    • C.

      The balance as per bank column of Cash Book and balances as per cash column of Cash Book

    • D.

      None of the above

    Correct Answer
    B. The balance as per bank column of Cash Book and the Pass Book
    Explanation
    A Bank Reconciliation Statement is prepared to identify the reasons for the discrepancy between the balance as per the bank column of the Cash Book and the balance as per the Pass Book. This statement helps in reconciling the differences and ensuring that the records of the bank and the company are accurate and in agreement. It allows for the identification of any errors, omissions, or timing differences that may have caused the discrepancy. By comparing the two balances, any discrepancies can be investigated and resolved, leading to a more accurate representation of the company's financial position.

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  • 2. 

    The cash book showed an overdraft of Rs. 1,500, but the pass book made up to the same date showed that cheques of Rs. 100,Rs. 50 and Rs. 125 respectively had not been presented for payments; and the cheque of Rs.400 paid into account had not been cleared. The balance as per the cash book will be

    • A.

      Rs. 1,100

    • B.

      Rs. 2,175

    • C.

      Rs. 1,625

    • D.

      Rs. 1,375

    Correct Answer
    C. Rs. 1,625
    Explanation
    The cash book shows an overdraft of Rs. 1,500, but the pass book reveals that certain cheques have not been presented for payment and a cheque paid into the account has not been cleared. Therefore, the balance as per the cash book needs to be adjusted to account for these transactions. The total amount of the uncleared cheques is Rs. 275 (Rs. 100 + Rs. 50 + Rs. 125), and the uncleared cheque paid into the account is Rs. 400. Subtracting these amounts from the overdraft of Rs. 1,500, the adjusted balance as per the cash book will be Rs. 1,625.

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  • 3. 

    Debit balance as per Cash Book of ABC Enterprises as on 31.3.2006 is Rs. 1,500.Cheques deposited but not cleared amounts to Rs. 100 and Cheques issued but not presented of Rs. 150. The bank allowed interest amounting Rs. 50 and collected dividend Rs. 50 on behalf of ABC Enterprises. Balance as per pass book should be

    • A.

      1,600

    • B.

      1,450

    • C.

      1,850

    • D.

      1,650

    Correct Answer
    D. 1,650
    Explanation
    The correct answer is 1,650. The balance as per the cash book is Rs. 1,500. Cheques deposited but not cleared amount to Rs. 100, which should be added to the cash book balance. Cheques issued but not presented amount to Rs. 150, which should be deducted from the cash book balance. The bank allowed interest amounting to Rs. 50 and collected dividend of Rs. 50 on behalf of ABC Enterprises, which should be added to the cash book balance. Therefore, the balance as per the pass book should be Rs. 1,500 + Rs. 100 - Rs. 150 + Rs. 50 + Rs. 50 = Rs. 1,650.

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  • 4. 

    When preparing a Bank Reconciliation Statement, if you start with a debit balance as per the Cash Book, then cheques issued but not presented within the period are

    • A.

      Added

    • B.

      Deducted

    • C.

      Not required to be adjusted

    • D.

      None of the above

    Correct Answer
    A. Added
    Explanation
    When preparing a Bank Reconciliation Statement, if you start with a debit balance as per the Cash Book, it means that the Cash Book shows more cash than what is actually available in the bank account. This could be due to cheques issued by the company but not yet presented to the bank for payment. These cheques need to be deducted from the Cash Book balance to reconcile it with the actual bank balance. Therefore, the correct answer is "Deducted".

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  • 5. 

    If the cheque is not presented for the payment upto the date of the preparation of the Bank Reconciliation Statement, then the balance as per Pass Book will be

    • A.

      Higher than the balance shown by the cashbofck by the amount of unpresented cheque.

    • B.

      Lower than the balance shown by the cashbook by the amount of unpresented cheque.

    • C.

      Same as shown by the cashbook.

    • D.

      None of the above

    Correct Answer
    A. Higher than the balance shown by the cashbofck by the amount of unpresented cheque.
    Explanation
    If the cheque is not presented for payment by the date of the Bank Reconciliation Statement, it means that the cheque has not been deducted from the cashbook balance. Therefore, the balance as per the Pass Book will be higher than the balance shown by the cashbook by the amount of the unpresented cheque.

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  • 6. 

    Balance as per cash book is Rs.5,000. Cheques issued but not presented for payment Rs.2,000 and cheques sent for collection but not collected Rs.1,500. The Bank had wrongly debited the account of firm by Rs.20 .Balance as per pass book will be                                                                                                                      

    • A.

      Rs.5,500

    • B.

      Rs.5,480

    • C.

      Rs.5,700

    • D.

      Rs.8,300

    Correct Answer
    B. Rs.5,480
    Explanation
    The balance as per the cash book is Rs.5,000. However, there are cheques issued but not presented for payment amounting to Rs.2,000 and cheques sent for collection but not collected amounting to Rs.1,500. These amounts need to be deducted from the balance as per the cash book. Additionally, the bank wrongly debited the account of the firm by Rs.20. This amount needs to be added back to the balance as per the cash book. Therefore, the correct balance as per the pass book will be Rs.5,000 - Rs.2,000 - Rs.1,500 + Rs.20 = Rs.5,480.

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  • 7. 

    Under bank reconciliation statement, while adjusting the cash book

    • A.

      All the errors and omissions in the cashbook are taken into consideration.

    • B.

      All the errors and omissions in the passbook are taken into A consideration.

    • C.

      Delays in recording in the passbook due to difference in timing are taken into consideration.

    • D.

      All of the above

    Correct Answer
    A. All the errors and omissions in the cashbook are taken into consideration.
    Explanation
    The bank reconciliation statement is used to compare the cash book (record of transactions made by the company) with the bank statement (record of transactions made by the bank). In this process, all the errors and omissions in the cash book are taken into consideration to ensure that the records are accurate and match with the bank statement. This helps in identifying any discrepancies and making necessary adjustments to the cash book.

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  • 8. 

    A purchase of Rs. 1,870 by cheques has been wrongly posted in the cashbook as Rs. 1,780. This has the effect of

    • A.

      Increasing the bank balance by Rs.90

    • B.

      Decreasing the bank balance by Rs.90

    • C.

      Increasing the bank balance by Rs.180

    • D.

      Decreasing the bank balance by Rs.180

    Correct Answer
    A. Increasing the bank balance by Rs.90
    Explanation
    The correct answer is "Increasing the bank balance by Rs.90" because if a purchase of Rs. 1,870 by cheques has been wrongly posted in the cashbook as Rs. 1,780, it means that the cashbook is showing less expenditure than the actual amount. This discrepancy results in an increase in the bank balance by the difference between the two amounts, which is Rs. 90.

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  • 9. 

    In the bank reconciliation statement, when balance as per the cashbook is taken as the starting point, then direct deposits from the customer of Rs. 452,500 in the bank will be

    • A.

      Added

    • B.

      Subtracted

    • C.

      Ignored

    • D.

      None of the above

    Correct Answer
    A. Added
    Explanation
    When preparing a bank reconciliation statement, deposits made by customers that have not yet been recorded in the cashbook need to be added. This is because the cashbook balance is the starting point, and any deposits made by customers that are not yet recorded in the cashbook will result in an increase in the bank balance. Therefore, the correct answer is "Added".

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  • 10. 

    The following particulars relate to the business of Mohan on March 31, 2006. Balance as shown by the cash book Rs.10,000 Cheques issued but not presented for payment Rs. 4,000 Cheque deposited but not yet collected Rs. 3,000 Balance as shown by the Bank pass book will be

    • A.

      Rs.9,000

    • B.

      Rs.10,000

    • C.

      Rs.11,000

    • D.

      None of the above

    Correct Answer
    C. Rs.11,000
    Explanation
    The balance as shown by the cash book is Rs.10,000. However, there are cheques issued but not presented for payment amounting to Rs.4,000 and cheques deposited but not yet collected amounting to Rs.3,000. Therefore, these amounts need to be adjusted in the cash book balance. When we add the cheques issued but not presented for payment and deduct the cheques deposited but not yet collected from the cash book balance, we get a balance of Rs.11,000, which should be the balance as shown by the Bank pass book.

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  • 11. 

    If bank balance as per cashbook differs from that appearing in the current account statement, then the balance considered for finalizing the accounts is of

    • A.

      Adjusted cash book.

    • B.

      Cash book before any adjustments.

    • C.

      Pass book.

    • D.

      Not taken to final accounts in case of difference in the balance

    Correct Answer
    A. Adjusted cash book.
    Explanation
    The correct answer is adjusted cash book. When there is a difference between the bank balance as per the cashbook and the current account statement, adjustments need to be made to the cashbook to reconcile the difference. The adjusted cashbook reflects the corrected balance after taking into account any errors or omissions. This adjusted balance is then considered for finalizing the accounts. The pass book is the bank statement provided by the bank, and it is used to compare and reconcile with the cashbook. If there is a difference in the balance, it needs to be resolved and adjusted in the cashbook before finalizing the accounts.

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  • 12. 

    The cashbook showed an overdraft of Rs. 2,000 as cash at bank, but the pass book,made up tothe same date showed that cheques of Rs. 200, Rs. 150 and Rs. 175 respectively had not been presented for payments; and the cheque of Rs. 600 paid into account had not been cleared. The balance as per the pass book will be  

    • A.

      Rs. 2,150

    • B.

      Rs. 2,175

    • C.

      Rs. 1,475

    • D.

      Rs. 2,075

    Correct Answer
    D. Rs. 2,075
    Explanation
    The cashbook showed an overdraft of Rs. 2,000, which means that the bank account has a negative balance. However, the passbook shows that there are cheques totaling Rs. 525 (Rs. 200 + Rs. 150 + Rs. 175) that have not been presented for payment, and a cheque of Rs. 600 that has not been cleared. Therefore, these cheques should be deducted from the overdraft amount.
    Rs. 2,000 - Rs. 525 - Rs. 600 = Rs. 875
    However, the passbook balance is the opposite of the cashbook balance, so the final answer is the negative of Rs. 875, which is Rs. -875 or Rs. 2,075.

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  • 13. 

    Mr. Shyam deposited a cheque on 28th March, 2006 for a sum of Rs.10,000. The cheque was collected on 4th April, 2006. If the bank balance as per cash book on 31st March, 2006 is Rs.1,00,000, balance as per pass B book will be

    • A.

      Rs.1,10,000

    • B.

      Rs.90,000

    • C.

      Rs1,00,000

    • D.

      None of the above

    Correct Answer
    B. Rs.90,000
    Explanation
    The balance as per pass B book will be Rs.90,000 because the cheque was collected on 4th April, 2006, which means it will be considered as an outstanding item in the bank reconciliation process. Therefore, it will not be included in the bank balance as per pass B book on 31st March, 2006.

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  • 14. 

    The Bank Account of Mukesh was balanced on 31st March, 2006. It showed an overdraft of Rs.50,000. It was observed that one cheque amounting Rs.20,000 deposited but not collected by bank till 31st March. Bank charges of Rs.500 were also charged by the bank during March but  accounted in the book of Mukesh on April 4, 2006. The bank statement of Mukesh shows balance of:                                      

    • A.

      Rs.70,500

    • B.

      Rs.69,500

    • C.

      Rs.70,000

    • D.

      Rs.50,000

    Correct Answer
    A. Rs.70,500
    Explanation
    The bank account of Mukesh was balanced on 31st March, 2006, showing an overdraft of Rs.50,000. However, there was a cheque amounting to Rs.20,000 that was deposited but not collected by the bank till 31st March. Additionally, bank charges of Rs.500 were charged by the bank during March but accounted for in the book of Mukesh on April 4, 2006. Therefore, the actual balance in Mukesh's bank statement would be the initial overdraft of Rs.50,000 plus the deposited cheque of Rs.20,000 minus the bank charges of Rs.500, resulting in a balance of Rs.70,500.

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  • 15. 

    Credit balance in the cash book means ________________.            

    • A.

      Overdraft as per pass book.

    • B.

      Favourable balance as per pass book.

    • C.

      Both (a) and (b).

    • D.

      None of the above.

    Correct Answer
    A. Overdraft as per pass book.
    Explanation
    Credit balance in the cash book refers to the situation where the cash book shows more cash or funds than what is actually available in the bank account. This means that there is an overdraft as per the pass book, indicating that the account holder has withdrawn more money from the bank account than the available balance. Therefore, the correct answer is "Overdraft as per pass book."

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  • 16. 

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

    • A.

      Credits

    • B.

      Debits

    • C.

      Either (a) or (b)

    • D.

      None of the three

    Correct Answer
    B. Debits
    Explanation
    When money is withdrawn from the bank, the bank debits the account of the customer. This means that the bank reduces the balance in the customer's account by the amount of money that was withdrawn. Debiting an account is a common accounting practice that reflects a decrease in assets or an increase in liabilities. In this case, the customer's account balance is considered an asset for the bank, and when money is withdrawn, the bank debits the account to reflect the decrease in the asset.

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  • 17. 

    There was difference in the bank column of cash book and pass book by Rs.2,500. On scrutiny it was found that interest of Rs.500 charged directly by the bank was not entered in the cash book. The same was adjusted in the cashbook before reconciliation statement. Now, in the bank reconciliation statement, this interest of Rs. 500 is to be

    • A.

      Added to the cash book balance.

    • B.

      Subtracted from the cash book balance.

    • C.

      Ignored while preparing bank reconciliation statement.

    • D.

      None of the above.

    Correct Answer
    C. Ignored while preparing bank reconciliation statement.
    Explanation
    The interest charged directly by the bank was not entered in the cash book, which means it was not considered in the cash book balance. Therefore, when preparing the bank reconciliation statement, this interest of Rs. 500 should be ignored as it does not affect the balance in the cash book.

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  • 18. 

    Bank pass book is also known as  ___________.  

    • A.

      Bank book

    • B.

      Bank account

    • C.

      Bank column

    • D.

      Bank statement

    Correct Answer
    D. Bank statement
    Explanation
    A bank passbook is a booklet provided by the bank to its customers to record all the transactions made in their bank account. It serves as a record of all the deposits, withdrawals, and other activities related to the account. However, a bank statement is a more detailed document provided by the bank to the account holder, usually on a monthly basis, which provides a summary of all the transactions made in the account during a specific period. It includes the opening and closing balance, all the credits and debits, and any fees or charges applied to the account. Therefore, a bank passbook is also known as a bank statement.

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  • 19. 

    When balance as per cash book (debit balance) as on 31st March is the starting point, what will be the effect while preparing bank reconciliation statement when out of the cheques amounting to Rs. 5,000 deposited, cheques aggregating Rs. 1,500 were credited in March and cheques aggregating Rs. 2,000 credited in April and the rest have not been collected?

    • A.

      Subtract Rs. 2,000.

    • B.

      Add Rs 2,000.

    • C.

      Subtract Rs.3,500.

    • D.

      Add Rs. 3,500.

    Correct Answer
    C. Subtract Rs.3,500.
    Explanation
    When preparing the bank reconciliation statement, the effect of the cheques that have not been collected yet is to subtract the amount from the balance as per the cash book. In this case, the cheques amounting to Rs. 5,000 were deposited, but only cheques aggregating Rs. 1,500 were credited in March and cheques aggregating Rs. 2,000 were credited in April. Therefore, the remaining amount of Rs. 1,500 (5,000 - 1,500 - 2,000) represents the cheques that have not been collected yet. Thus, the correct answer is to subtract Rs. 3,500 from the balance as per the cash book.

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  • 20. 

    Debit balance as per Cash Book of ABC Enterprises as on 31.3.2006 is Rs. 10,000.Cheques deposited but not cleared amounts to Rs. 1,000 andCheques issued but not presented of Rs. 2,000.. Balance as per pass book should be

    • A.

      11,000.

    • B.

      9,000.

    • C.

      10,000.

    • D.

      None of the three

    Correct Answer
    A. 11,000.
    Explanation
    The correct answer is 11,000. The given information states that the debit balance as per the Cash Book is Rs. 10,000. Additionally, there are cheques deposited but not cleared amounting to Rs. 1,000 and cheques issued but not presented of Rs. 2,000. These amounts need to be added to the debit balance of Rs. 10,000 to determine the correct balance as per the pass book. Therefore, the correct balance as per the pass book should be Rs. 11,000.

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  • 21. 

    When preparing a Bank Reconciliation Statement if you start with balance as per Pass Book, then cheques paid by bank recorded twice in Pass Book Rs. 1050 will be

    • A.

      Added

    • B.

      Deducted

    • C.

      Not required to be adjusted

    • D.

      None of the three

    Correct Answer
    A. Added
    Explanation
    When preparing a Bank Reconciliation Statement, if you start with the balance as per Pass Book, it means you are considering the transactions recorded by the bank. If cheques paid by the bank are recorded twice in the Pass Book, it means they have been included in the Pass Book balance twice. To reconcile this, you need to deduct the amount of the duplicate entry from the balance as per Pass Book. Therefore, the correct answer is "Deducted".

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  • 22. 

    When preparing a Bank reconciliation statement, if you start with a debit  balance as per cash book, cheques sent to Bank but not collected within the period should be              

    • A.

      Added

    • B.

      Deducted

    • C.

      Not required to be adjusted

    • D.

      None of the three

    Correct Answer
    B. Deducted
    Explanation
    When preparing a bank reconciliation statement, cheques sent to the bank but not collected within the period should be deducted from the balance as per the cash book. This is because these cheques have been recorded as an outflow in the cash book, but they have not yet been processed by the bank and therefore should not be included in the bank balance. Deducting these cheques ensures that the bank balance in the reconciliation statement reflects the actual amount of funds available in the bank account.

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  • 23. 

    Balance as per Pass Book is                                         Rs. 2,430 Cheques paid but not yet credited                                Rs. 1,390 Bank Charges entered in pass book                               Rs. 260 Cheques issued but not presented for payment Rs. 1,710 Balance as per Cash Book will be

    • A.

      Rs. 2,370

    • B.

      Rs. 2,500

    • C.

      Rs. 2,300

    • D.

      Rs. 2,380

    Correct Answer
    A. Rs. 2,370
    Explanation
    The balance as per the Pass Book is given as Rs. 2,430. Cheques paid but not yet credited are Rs. 1,390 and bank charges entered in the Pass Book are Rs. 260. Cheques issued but not presented for payment are Rs. 1,710. To calculate the balance as per the Cash Book, we subtract the cheques paid but not yet credited and bank charges from the balance as per the Pass Book and add the cheques issued but not presented for payment. Therefore, the balance as per the Cash Book will be Rs. 2,370.

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  • 24. 

    Overdraft as per Cash Book                                        Rs. 6,340 Cheque deposited but not credited                            Rs.2,360 Cheques issued but not presented for payment    Rs. 2,368 Overdraft as per Pass Book will be

    • A.

      Rs. 6,332

    • B.

      Rs. 6,000

    • C.

      Rs. 6,300

    • D.

      Rs. 6,330

    Correct Answer
    A. Rs. 6,332
    Explanation
    The correct answer is Rs. 6,332. This can be determined by adding the overdraft as per Cash Book (Rs. 6,340) with the cheque deposited but not credited (Rs. 2,360) and subtracting the cheques issued but not presented for payment (Rs. 2,368). This calculation results in an overdraft of Rs. 6,332 as per the Pass Book.

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  • 25. 

    When balance as per cash book is the starting point, and cheques issued for payment Rs. 400 was wrongly credit by Bank as Rs.900 then in the bank reconciliation statement cash balance will be

    • A.

      Added by Rs. 1300

    • B.

      Subtracted by Rs. 1300

    • C.

      Added Rs. 900

    • D.

      Subtracted by Rs. 400

    Correct Answer
    A. Added by Rs. 1300
    Explanation
    If the cheques issued for payment Rs. 400 was wrongly credited by the bank as Rs. 900, it means that the bank has credited an extra Rs. 500 to the cash balance in the cash book. Therefore, in the bank reconciliation statement, the cash balance will be adjusted by adding Rs. 1300 (Rs. 900 + Rs. 400) to correct the error.

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  • 26. 

    Over draft as per pass book is given Rs. 10000 (1) Cheques deposited in the Bank but not recorded in Cash Book Rs. 100 . (2) Cheques drawn but not presented for payment Rs. 6000 . (3) Bank charges recorded twice in cash book Rs. 30 Overdraft as per Cash Book will be 

    • A.

      Rs. 16000

    • B.

      Rs. 16130

    • C.

      Rs. 15000

    • D.

      None of the three.

    Correct Answer
    B. Rs. 16130
    Explanation
    The overdraft as per the cash book will be Rs. 16130. This is because the overdraft is calculated by adding the outstanding cheques and deducting any deposits not recorded in the cash book. In this case, the outstanding cheques amount to Rs. 6000 and the deposits not recorded amount to Rs. 100. Additionally, the bank charges recorded twice in the cash book should be deducted, which amount to Rs. 30. Therefore, the overdraft is calculated as Rs. 6000 + Rs. 100 - Rs. 30 = Rs. 6070. Adding this to the initial overdraft of Rs. 10000 gives a total overdraft of Rs. 16070.

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  • 27. 

    Dr. balance as per cash book is Rs. 3000. Cheque issued but not presented for payment Rs. 500, Interest collected by Bank Rs. 400, Deposit by a Customer direct into his bank Rs. 250. Bank reconciliation statement will show balance as per Pass Book                 

    • A.

      Rs.4,150

    • B.

      Rs 4,000

    • C.

      Rs 4,500

    • D.

      None of the above.

    Correct Answer
    A. Rs.4,150
    Explanation
    The correct answer is Rs.4,150. The balance as per the cash book is Rs. 3000. However, there are certain adjustments that need to be made to reconcile the balance with the passbook. Cheque issued but not presented for payment is Rs. 500, which needs to be deducted from the cash book balance. Interest collected by the bank is Rs. 400, which needs to be added to the cash book balance. Deposit by a customer directly into his bank is Rs. 250, which also needs to be added to the cash book balance. Therefore, the adjusted balance as per the passbook will be Rs. 4,150.

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  • 28. 

    While preparing a Bank Reconciliation Statement, if you start with overdraft asper Cash Book, then interest debited in pass book but not yet in cash book with in the period is

    • A.

      Added

    • B.

      Deducted

    • C.

      Not required to be adjusted

    • D.

      None of the above

    Correct Answer
    A. Added
    Explanation
    When preparing a Bank Reconciliation Statement, if you start with an overdraft as per the Cash Book, it means that the balance in the Cash Book is negative, indicating that the company has taken out more money from the bank account than it had in the account. In this case, if interest has been debited in the Pass Book (bank statement) but has not yet been recorded in the Cash Book within the given period, it means that the company owes the bank more money due to the interest charges. Therefore, the interest should be added to the Cash Book balance to reconcile it with the balance in the Pass Book.

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  • 29. 

    In the bank reconciliation statement when balance as per cash book is taken as the starting point then Bank charges debited by Bank Rs. 10, cheques paid in but dishonoured Rs. 200 and cheques paid in but not credited by bank in 950 will be 

    • A.

      Added

    • B.

      Subtracted

    • C.

      Ignored

    • D.

      None of the three

    Correct Answer
    B. Subtracted
    Explanation
    When the balance as per cash book is taken as the starting point, bank charges debited by the bank, cheques paid in but dishonored, and cheques paid in but not credited by the bank are all adjustments that need to be subtracted from the balance. Therefore, the correct answer is "Subtracted".

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  • 30. 

    Balance as per adjusted cash book                             Rs.274 (i)      Cheques not yet presented                                  Rs.730 (ii)     Cheques deposited not yet recorded by bank Rs.477 Balance as per Pass Book will be

    • A.

      Rs.527

    • B.

      Rs.525

    • C.

      Rs.500

    • D.

      None of the three.

    Correct Answer
    A. Rs.527
    Explanation
    The balance as per the adjusted cash book is Rs.274. This means that after adjusting for any outstanding cheques and deposits not yet recorded by the bank, the cash book shows a balance of Rs.274. The cheques not yet presented amount to Rs.730, and the cheques deposited but not yet recorded by the bank amount to Rs.477. Therefore, the balance as per the pass book will be the balance as per the adjusted cash book plus the cheques not yet presented minus the cheques deposited but not yet recorded by the bank. Calculating this, the balance as per the pass book will be Rs.274 + Rs.730 - Rs.477 = Rs.527.

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  • 31. 

    Balance as per Cash Book on 31.03.2006 Rs. 10,000 29Cheque issued and presented on 4th April Rs. 2,300 Cheque sent to bank but not credited Rs. 2,000 B/P paid by Bank not entered in cash Book Rs. 800 Balance as per pass book will be

    • A.

      Rs.9,500

    • B.

      Rs.9,000

    • C.

      Rs.9,800

    • D.

      None of the three.

    Correct Answer
    A. Rs.9,500
    Explanation
    The balance as per the Cash Book on 31.03.2006 is Rs. 10,000. However, there are certain transactions that need to be considered in order to determine the balance as per the pass book.

    1. Cheque issued and presented on 4th April for Rs. 2,300: This transaction has not yet been recorded in the Cash Book, so it will reduce the balance in the pass book by Rs. 2,300.

    2. Cheque sent to the bank but not credited for Rs. 2,000: Since this transaction has not been credited in the Cash Book, it will reduce the balance in the pass book by Rs. 2,000.

    3. B/P paid by the bank not entered in the Cash Book for Rs. 800: As this transaction has not been recorded in the Cash Book, it will reduce the balance in the pass book by Rs. 800.

    Therefore, the total deductions from the balance as per the Cash Book would be Rs. 2,300 + Rs. 2,000 + Rs. 800 = Rs. 5,100.

    Hence, the balance as per the pass book will be Rs. 10,000 - Rs. 5,100 = Rs. 9,500.

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  • 32. 

    Bank Reconciliation Statement is

    • A.

      A part of the cash book

    • B.

      A statement showing the causes of differences between the balance of cash book and passbook.

    • C.

      A part of financial statement

    • D.

      None of the above.

    Correct Answer
    B. A statement showing the causes of differences between the balance of cash book and passbook.
    Explanation
    The correct answer is "A statement showing the causes of differences between the balance of cash book and passbook." This is because a bank reconciliation statement is used to reconcile the differences between the balance shown in the cash book (the company's record of its cash transactions) and the balance shown in the bank passbook (the bank's record of the company's transactions). It helps to identify any errors, omissions, or timing differences that may have caused the discrepancies between the two balances.

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  • 33. 

    Credit balance as per passbook on 31.3.2006 is Rs.22000. Cheques deposited but not cleared amount to Rs.2000 and cheques issued but not presented of Rs.8000. Balance as per cash book should be

    • A.

      Rs.32,000

    • B.

      Rs.16,000

    • C.

      Rs.28,000

    • D.

      Rs. 18,000

    Correct Answer
    B. Rs.16,000
    Explanation
    The credit balance as per passbook on 31.3.2006 is Rs.22000. Cheques deposited but not cleared amount to Rs.2000 and cheques issued but not presented of Rs.8000. To find the balance as per cash book, we need to subtract the amount of cheques deposited but not cleared and add the amount of cheques issued but not presented to the credit balance as per passbook. Therefore, the balance as per cash book should be Rs.22000 - Rs.2000 + Rs.8000 = Rs.16000.

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  • 34. 

    When drawing up a B.R.S. If you start with a debit balance as per the Bank statement, the unpresented cheques should be

    • A.

      Not required to be adjusted

    • B.

      Subtracted

    • C.

      Added

    • D.

      None of the above

    Correct Answer
    C. Added
    Explanation
    When drawing up a Bank Reconciliation Statement (B.R.S.), if you start with a debit balance as per the Bank statement, it means that the Bank statement shows more withdrawals than what is recorded in the company's books. This could be due to unpresented cheques, which are cheques issued by the company but have not yet been presented to the bank for payment. In order to reconcile the difference between the Bank statement and the company's books, these unpresented cheques need to be added to the company's balance in the B.R.S. Therefore, the correct answer is "Added".

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  • 35. 

    In the bank reconciliation statement, when balance as per cash book is taken as the starting point, the direct deposits from customer of Rs.10,000 in the bank will be

    • A.

      Subtracted

    • B.

      Added

    • C.

      Ignored

    • D.

      None of the above

    Correct Answer
    B. Added
    Explanation
    When the balance as per cash book is taken as the starting point in the bank reconciliation statement, the direct deposits from customers of Rs.10,000 in the bank will be added. This is because the cash book records all the transactions made by the company, including the deposits made by customers. Therefore, when reconciling the cash book balance with the bank statement, the deposits made by customers should be added to the cash book balance to reflect the correct balance as per the bank statement.

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  • 36. 

    Which one of these is not a cause of difference in balance as per pass book and as per cash book

    • A.

      Errors in cash book

    • B.

      Errors in pass book

    • C.

      Cheques deposited and cleared

    • D.

      Cheques issued but not presented for payment.

    Correct Answer
    C. Cheques deposited and cleared
    Explanation
    The reason why "Cheques deposited and cleared" is not a cause of difference in balance between the pass book and cash book is because when a cheque is deposited and cleared, it means that the amount has been successfully added to the bank account and recorded in both the pass book and cash book. Therefore, there should not be any discrepancy in balance due to this transaction.

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  • 37. 

    Debit balance as per pass book means

    • A.

      Bank overdraft as per cash book

    • B.

      Debit balance in pass book

    • C.

      Cash balance with bank

    • D.

      None of the above

    Correct Answer
    A. Bank overdraft as per cash book
    Explanation
    A debit balance as per pass book means that the pass book shows a higher amount of withdrawals or debits compared to the amount of deposits or credits. This indicates that the bank account is overdrawn or in a negative balance. The correct answer, "Bank overdraft as per cash book," aligns with this explanation as it states that the cash book (which records all transactions) shows a bank overdraft, confirming the negative balance in the pass book.

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  • 38. 

    Difference in bank balance as per bank pass book and cash book may arise on account of

    • A.

      Cheque deposited but not collected

    • B.

      Direct payment by customer in bank

    • C.

      Cheque issued but not presented

    • D.

      All of the three

    Correct Answer
    D. All of the three
    Explanation
    The difference in bank balance as per the bank pass book and cash book can arise due to various reasons. Cheques that have been deposited but not yet collected by the bank can cause a difference in balances. Similarly, when customers make direct payments to the bank without recording them in the cash book, it can lead to a difference. Additionally, if cheques have been issued but not yet presented to the bank for payment, it can also result in a discrepancy between the two balances. Therefore, all three factors can contribute to the difference in bank balance.

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  • 39. 

    When the overdraft as per cash book is the starting point and a cheque of Rs.1500 deposited into bank has not been recorded in cash book, then in the bank reconciliation statement it will be

    • A.

      Added by Rs. 1,500

    • B.

      Deducted by Rs 1,500

    • C.

      Deducted by Rs.3,000

    • D.

      Added by Rs.3,000

    Correct Answer
    B. Deducted by Rs 1,500
    Explanation
    In the bank reconciliation statement, the cheque of Rs.1500 deposited into the bank but not recorded in the cash book will be deducted by Rs. 1,500. This is because the cash book balance is the starting point, and since the cheque deposit is not recorded, it means that the cash book balance is overstated by Rs. 1,500. Therefore, to reconcile the cash book balance with the bank statement balance, the unrecorded cheque deposit needs to be deducted from the cash book balance.

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  • 40. 

    Bank reconciliation statement is prepared with the either balances of

    • A.

      Pass book

    • B.

      Cash book

    • C.

      Both(a)or(b)

    • D.

      None of the above

    Correct Answer
    C. Both(a)or(b)
    Explanation
    The bank reconciliation statement is prepared with the balances of both the pass book and the cash book. This is because the purpose of the bank reconciliation statement is to identify and explain any differences between the two sets of records. By comparing the balances of both the pass book and the cash book, any discrepancies such as outstanding checks, bank charges, or deposits in transit can be identified and adjusted for. Therefore, the correct answer is both (a) or (b), as both the pass book and the cash book balances are used in preparing the bank reconciliation statement.

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  • 41. 

    When overdraft as per Cash Book is the starting point then wrong debit in pass book will be

    • A.

      Deducted from the Bank Reconciliation Statement

    • B.

      No effect in the Bank Reconciliation Statement

    • C.

      Added in the Bank Reconciliation Statement

    • D.

      None of the three

    Correct Answer
    C. Added in the Bank Reconciliation Statement
    Explanation
    If there is an overdraft as per the Cash Book, it means that the company has a negative balance in its bank account. If there is a wrong debit in the pass book, it means that the bank has mistakenly debited the company's account for an amount that it should not have. In this case, the correct answer is "Added in the Bank Reconciliation Statement" because the wrong debit will increase the balance in the pass book, which needs to be adjusted in the bank reconciliation statement to match the balance in the Cash Book.

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  • 42. 

    Ratan deposited a cheque on 25th Jan.,2006 for a sum of Rs.20,000.The cheque was collected on 2 February ,2006.If the bank balance as per pass book as on 31 January 2006 is Rs.60,000; balance as per cash book will be

    • A.

      Rs.60,000

    • B.

      Rs.40,000

    • C.

      Rs.70,000

    • D.

      Rs.80,000

    Correct Answer
    D. Rs.80,000
    Explanation
    The balance as per cash book will be Rs.80,000 because the cheque that Ratan deposited on 25th Jan, 2006 was collected on 2nd February, 2006. Therefore, the amount of Rs.20,000 from the cheque would be added to the cash book balance, resulting in a total balance of Rs.80,000.

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  • 43. 

    When overdraft as per Cash book is the starting point, Bank charges of Rs.300 recorded twice in the pass book will be

    • A.

      Added by Rs.300

    • B.

      Deducted by Rs.300

    • C.

      Deducted by Rs.600

    • D.

      Added by Rs.600

    Correct Answer
    A. Added by Rs.300
    Explanation
    When overdraft as per Cash book is the starting point, Bank charges of Rs.300 recorded twice in the pass book will be added by Rs.300. This means that the bank charges of Rs.300 will be included in the overdraft amount, increasing the overall balance in the Cash book.

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  • 44. 

    Bank balance as per pass book Rs.20,000 Cheque issued but not presented Rs.7,000 Cheque deposited but not cleared Rs.5,000 Bank balance as per cash book will be

    • A.

      Rs.22,000

    • B.

      Rs.32,000

    • C.

      Rs. 18,000

    • D.

      Rs.8,000

    Correct Answer
    C. Rs. 18,000
    Explanation
    The bank balance as per the pass book is Rs.20,000. However, there are outstanding cheques of Rs.7,000 that have been issued but not presented, and Rs.5,000 that have been deposited but not cleared. Therefore, these amounts need to be adjusted in the bank balance. Deducting the outstanding cheques from the pass book balance, the bank balance as per the cash book will be Rs.18,000.

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  • 45. 

    Overdraft as per pass book Rs.450 1. Cheque drawn but not presented for payment Rs.105 2. Cheque sent for collection but not credited by bank Rs.300

    • A.

      Rs.645

    • B.

      Rs.255

    • C.

      Rs.855

    • D.

      Rs.45

    Correct Answer
    B. Rs.255
    Explanation
    The correct answer is Rs.255. This can be determined by subtracting the total amount of cheques that have not been presented or credited by the bank from the overdraft amount as per the passbook. In this case, Rs.105 (cheque drawn but not presented) and Rs.300 (cheque sent for collection but not credited) are subtracted from Rs.450 (overdraft as per passbook), resulting in Rs.255.

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