Quiz : Bank Reconciliation Statement

By Mamta Narula
Mamta Narula, Commerce
Mamta achieved the Gold Award in a website design competition hosted by Give Something Back International (GSBI). Collaborating with students from Littleton High School, Colorado, USA, and Salakhov's Gymnasia, Surgut, Russia, Mamta showcased exceptional creativity in developing a unique website addressing "Teenage Issues."
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, Commerce
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Questions: 12 | Attempts: 3,663

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Quiz :  Bank Reconciliation Statement - Quiz

Check your knowledge of Bank Reconciliation Statement


Questions and Answers
  • 1. 

    Credit balance in the cash book means ____

    • A.

      Negative balance

    • B.

      Positive balance

    Correct Answer
    A. Negative balance
    Explanation
    Credit balance in the cash book means a negative balance. This indicates that the total amount of credit entries or inflows of cash into the cash book exceeds the total amount of debit entries or outflows of cash. In other words, there is more money coming into the cash book than going out, resulting in a surplus of funds.

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  • 2. 

    Debit balance in the Pass book means ____

    • A.

      Negative balance

    • B.

      Positive balance

    Correct Answer
    A. Negative balance
    Explanation
    A debit balance in the Pass book means a negative balance. This indicates that the amount of money recorded in the Pass book as debits (withdrawals or expenses) exceeds the amount of money recorded as credits (deposits or income). In other words, the account holder has more liabilities or expenses than assets or income, resulting in a negative balance.

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  • 3. 

    Debit balance in the cash book means ____

    • A.

      Negative balance

    • B.

      Positive balance

    Correct Answer
    B. Positive balance
    Explanation
    A debit balance in the cash book means a positive balance. In accounting, a debit entry increases the balance of an asset account, such as cash. Therefore, when there is a debit balance in the cash book, it indicates that there is more cash on hand than the total amount of cash payments made. This suggests that the company has more cash inflows than outflows, resulting in a positive balance.

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  • 4. 

    Credit balance in the Pass book means ____

    • A.

      Negative balance

    • B.

      Positive balance

    Correct Answer
    B. Positive balance
    Explanation
    The credit balance in the Pass book refers to a positive balance. This means that the amount of money deposited or credited to the account is greater than the amount of money withdrawn or debited from the account. In other words, the account has more funds than it started with, indicating a surplus or positive balance.

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  • 5. 

    Bank Reconciliation Statement is a statement prepared by Bank

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The given statement is false. A Bank Reconciliation Statement is not prepared by the bank, but rather by the account holder. It is a statement that compares the bank's records of the account with the account holder's records, in order to identify any discrepancies or differences between the two. This statement helps in ensuring that both the bank and the account holder have accurate and up-to-date records of the account's transactions.

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  • 6. 

    Cheques issued are posted on the Debit side of the bank column of Cash Book.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    Cheques issued are actually posted on the Credit side of the bank column of Cash Book. This is because when a cheque is issued, it reduces the balance of the bank account, hence it is recorded as a credit entry in the Cash Book.

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  • 7. 

    Cheques deposited in to bank are recorded on which side of the bank column of Cash Book.?

    • A.

      Debit

    • B.

      Credit

    Correct Answer
    A. Debit
    Explanation
    Cheques deposited in to bank are recorded on the debit side of the bank column of the Cash Book. This is because when a cheque is deposited, it increases the bank balance, which is an asset. In the Cash Book, assets are recorded on the debit side, hence the cheques deposited are also recorded on the debit side.

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  • 8. 

    Direct deposits in the bank by a customer would increase the balance shown by the Pass Book.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    When a customer makes a direct deposit into their bank account, the money is added to their balance. This increase in the balance is then reflected in the Pass Book, which is a record of all transactions and account balances. Therefore, it is true that direct deposits in the bank by a customer would increase the balance shown by the Pass Book.

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  • 9. 

    Interest allowed by Bank is recorded on which side of the bank column of Cash Book.?

    • A.

      Debit

    • B.

      Credit

    Correct Answer
    A. Debit
    Explanation
    Interest allowed by the bank is recorded on the debit side of the bank column of the Cash Book. This is because the bank has allowed the interest to the account holder, which increases the balance in the account. Therefore, it is recorded as a debit entry, indicating an increase in the account balance.

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  • 10. 

    Insurance premium paid by bank is recorded on which side of the Pass  Book.?

    • A.

      Debit

    • B.

      Credit

    Correct Answer
    A. Debit
    Explanation
    The insurance premium paid by the bank is recorded on the debit side of the Pass Book. This is because the payment of the insurance premium is an expense for the bank, and expenses are recorded on the debit side of the accounting books.

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  • 11. 

    Cheques issued but not encashed by bank is recorded on which side of the bank column of cash   Book.?

    • A.

      Debit

    • B.

      Credit

    Correct Answer
    B. Credit
    Explanation
    When cheques are issued but not encashed by the bank, it means that the bank owes the money to the person or organization to whom the cheques were issued. Therefore, this transaction should be recorded on the credit side of the bank column in the cash book. This reflects an increase in the bank's liability to pay the amount mentioned in the cheques.

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  • 12. 

    Bank credits firm’s account as soon as it receives cheques from the firm

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is false because banks do not credit a firm's account as soon as they receive cheques from the firm. Instead, banks typically take some time to process and verify the cheques before crediting the account. This process may involve checking the validity of the cheque, ensuring sufficient funds are available, and verifying the signature. Only after these checks are completed will the bank credit the firm's account with the amount stated on the cheque.

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Mamta Narula |Commerce |
Mamta achieved the Gold Award in a website design competition hosted by Give Something Back International (GSBI). Collaborating with students from Littleton High School, Colorado, USA, and Salakhov's Gymnasia, Surgut, Russia, Mamta showcased exceptional creativity in developing a unique website addressing "Teenage Issues."
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