Bank Reconciliation

Question 1

Direct debt

Answer 1

Withdrawal of cash, straight out of account

Question 2

Direct credit

Answer 2

Deposit of cash, straight into account t

Question 3

Deposit no yet credited

Answer 3

Cash deposit that is yet to appear on the balance sheet

Question 4

Unpresented cheque

Answer 4

A cheque that had yet to be presented to the payee

Question 5

Dishonoured cheque

Answer 5

A cheque that cannot be exchanged for cash as there are not enough funds in the payer’s account

Question 6

Bank reconciliation statement

Answer 6

Balance as per the bank statement

+deposits not yet credited
-unpresented cheques

= balance as per the firm’s cash records

Question 7

Purpose of bank reconciliation

Answer 7

The purpose of the bank reconciliation is to explain the difference between the bank balance and the firm’s balance

Question 8

What is bank reconciliation

Answer 8

The process of verifying that the entries in the cash journals of the business match the cash journals of he firm’s bank