Bank Reconcilistion Statement

Question 1

Cash account is a:
A. Personal account
B. Nominal account
C. Real account
D. Both Personal & real account

Answer 1

C.

Question 2

A statement which is used to reconcile the bank balance as per cash book with the balance as per pass book is called.
A. Bank Statement
B. Income Statement
C. Bank Reconciliation Statement
D. Financial Statement

Answer 2

C.

Question 3

Bank Reconciliation Statement is prepared by:
A. Banker
B. Customer’s accountant
C. Auditors
D. Manager

Answer 3

B.

Question 4

The favorable balance of cash book bank column is:
A. Credit balance
B. Debit Balance
C. Both Debit and Credit balance
D. None of these

Answer 4

B.

Question 5

The favorable balance of bank statement is:
A. Credit balance
B. Debit balance
C. Zero balance
D. a, b, c

Answer 5

A.

Question 6

Unfavorable balances mean:
A. Credit balance in the pass book
B. Credit balance in the cash book
C. Debit balance in Bank statement
D. Both b, c

Answer 6

D.

Question 7

Cheques issued to a creditor but not presented for payment are called:
A. Un-credited cheques
B. Uncollected cheques
C. Un-presented Cheques
D. Dishonored Cheques

Answer 7

C.

Question 8

Cheques received from debtors but not collected by the bank are called:
A. Dishonored cheques
B. Un-credited cheques
C. Un-presented Cheques
D. None of these

Answer 8

B.

Question 9

The debit balances of cash and bank accounts in cash book are called:
A. Income
B. Liabilities
C. Expenses
D. Assets

Answer 9

D.

Question 10

The credit balance of bank account in cash book is called:
A. Expense
B. Asset
C. Income.
D. Liability

Answer 10

D.

Question 11

Pass Book is prepared by:
A. Debtor
B. Banker
C. Customer
D. Creditor

Answer 11

B.

Question 12

A customer cheque cheque returned dishonored is recorded in:
A. Return outward book
B. Bill receivable book
C. Return inward book
D. Cash book

Answer 12

D.

Question 13

If receipt side of the cash book is under cast by Rs. 300, when overdraft as per bank statement is the starting point:
A. Rs.300 will be added
B. Rs.600 will be added
C. Rs.300 will be deducted
D. Rs.600 will be deducted

Answer 13

A.

Question 14

The balance of petty cash book is:
A. A liability
B. An asset
C. A gain
D. An Expense

Answer 14

B.

Question 15

A copy of the customer’s account in the banks ledger is called:
A. Deposit statement
B. Balance statement
C. Bank statement
D. Customer statement

Answer 15

C.

Question 16

The term imprest system is used in relation to:
A. Cheque book
B. Pay-in-slip book
C. Cash book
D. Petty Cash book

Answer 16

D.

Question 17

Any written evidence in support of a business transaction is called:
A. Voucher
B. Cash Transaction
C. Ledger
D. Cash memo

Answer 17

A.

Question 18

Differentiate between Pay-in-slip and Cheque book. (Year 2015)

Answer 18

Difference Between Pay-in-Slip and Cheque Book

Feature Pay-in-Slip Cheque Book

Definition

A form used to deposit money (cash or cheques) into a bank account.
A booklet containing cheques used to withdraw money or make payments.

Purpose

Used for depositing money into an account.
Used for withdrawing money or making payments.

Issued By
The bank provides pay-in-slips at deposit counters.
The bank issues a cheque book to account holders.

Usage

The depositor fills in details like account number, amount, and type of deposit (cash or cheque).
The account holder writes a cheque to pay someone or withdraw cash.

Signature Requirement
Usually, no signature is required for cash deposits.
The cheque must be signed by the account holder.

Effect on Account
Increases the account balance (deposit).
Decreases the account balance (withdrawal or payment).

Key Takeaway:
• A pay-in-slip is used for depositing money into an account.
• A cheque book is used for withdrawing money or making payments.

Alright! Imagine you have a piggy bank and a wallet.
• A pay-in-slip is like a note you give to the bank when you want to put money into your piggy bank. You write down how much you’re adding, and the bank keeps a record of it.
• A cheque book is like a special notebook with money tickets inside. When you want to give money to someone, you write their name and how much money to give, and the bank takes that money from your piggy bank and gives it to them.

So, pay-in-slip = putting money in, and cheque book = taking money out or giving it to someone else!

Question 19

Distinguish between pay-in-slip and cheque book. (Year 2017)

Question 20

Write any three causes of disagreement between the balances as per cash book and pass book. (Year 2018)

Question 21

Bank Reconciliation Statement

Answer 21

If any discrepancy arises between the balance of the Cash book and that of Pass book, the depositor prepares a statement to explain the causes of discrepancies and to reconcile the two balances.
This statement of explanation is called Bank reconciliation statement.

Question 22

Cash Book /Cash Journal

Answer 22

A book in which all the transactions in which cash is involved, (whether the business has paid cash or received cash) are recorded is called cash book or cash Journal.
Usually a copy of Depositor’s Account is provided by the bank to the depositor, which is called Pass Book.

Question 23

Pass Book / Bank Statement

Answer 23

This book is written by the bank. After suitable intervals the depositor submits the Pass Book to the bank a bank and the bank in turn returns it to the depositor after recording the transactions therein.
Sometimes, instead of providing a Pass Book to the depositor, at certain intervals, usually monthly, the bank sends each depositor a ‘bank statement’, which is a record of the beginning balance, any increase and decrease that have occurred since the previous statement and the ending balance of the depositor’s account with the bank. The Pass Book and bank statement serve the same purpose to the depositor

Question 24

Distinction b/w Cash Book
& Pass Book

Answer 24

Cash Book Pass Book

It is written by depositor.
It is written by the bank, but remains in depositor possession.

Money deposited is recorded at the debit side and money withdrawn on credit side
Money deposited is recorded at the credit side and money withdrawn on debit side.

A cheque deposited for collection is recorded on the date of deposit.
It is recorded on the date when it is actually collected from Debtor’s bank

A cheque when issued to the creditor is recorded on the date of issue
It is recorded when it is paid by the bank to the creditor.

Its debit balance shows cash at bank and credit balance shows bank overdraft
Its debit balance shows bank overdraft and credit balance shows cash at bank

Question 25

Reasons for differences in balance as per cash book and pass book

Answer 25

1. Cheques issued but not yet presented for payment 2. Cheques deposited into bank but not yet collected by bank. 3. Direct payment made by the bank on behalf of the customer. 4. Amounts directly deposited in the bank account by customers. 5. Interest and dividend collected by the bank. 6. Charges debited by the bank 7. Cheques deposited/ Bills discounted dishonoured. 8. Errors committed in recording transactions by the firm. 9. Errors committed in recording transactions by the bank.

Question 26

According to the cash book of Sarfraz Ltd. Company has a balance at the bank Rs. 3,800 on 31 March 2023 but this did not agree with the bank statement on the same date. An investigation into the difference gives the following information: (1) Trade subscription Rs. 500 paid by the bank on 31st March 2023 has not been entered is cash book. (2) A cheque paid for advertising on 14 March for Rs. 197 has not been entered in cash book (3) Cheques of Rs. 1100 sent to creditors on 30 March 2023 were not paid by the bank until 5th April 2023. (4) Cheques received from customers amounting to Rs. 1,680 were paid into bank on 26th March, but were not credited by the bank. (5) Interest on investment collected by bank Rs. 300, not yet recorded in cash book. Prepare a bank Reconciliation statement as on 31st March 2023.

Question 27

Prepare a Bank Reconciliation Statement as on 31st December 2023 from the following particulars. 1. Bank balance as per the Cash Book on 31st Dec, 2023, Rs. 23,510 2. Cheques for Rs 3,000 deposited for collection but not credited by the bank prior to 31st December 2023 3. Cheques amounting to Rs. 4,000 were issued on 28th December, were not cashed up to 31st December 2023, 4. A wrong debit of Rs. 400 appeared in Pass Book 5. Bank charges Rs. 10 appeared in the Pass Book but not in the Cash Book

Question 28

The balance as per cash book of Aslam Traders on 31st January 2023 was Rs.19,370 (1) Cheques amounting to Rs. 2,820 issued to a creditor and entered in cash book were not presented for payment, (2) A cheque for Rs. 1,750 received from Universal Ltd, and paid into bank was dishonored, (3) An out-station cheque amounting to Rs. 575 entered in cash book as paid into bank but has not been collected, by bank. (4) Bank charges Rs. 25 have not been entered in cash book (5) Interest on Govt. Securities Rs. 300 collected and credited in Pass Book. Prepare a bank Reconciliation Statement

Question 29

From the following particulars prepare a Bank reconciliation statement as at 31 December 2023 of Salman: 1. Overdrawn as per cash book Rs.5,100 2. Interest on Bank overdraft debited in pass book only Rs. 115 3. Cheques issued but not cashed' from bank Rs. 900 4. Cheques paid in but not cleared by bank Rs.1,375 5. B/R discounted with the bank in November but dishonored 31st December Rs.315

Question 30

From the following particulars, prepare a Bank Reconciliation statement of Mr. Khubaib as on 31st December, 2015: (a) Balance as per pass book Rs. 5,434. (b) Cheque issued but not presented Rs. 1,060. (c) Cheque deposited but not credited by bank Rs. 690. (d) Interest charged by bank Rs. 36. (e) Interest on Govt. securities Rs. 70.

Question 31

From the glowing particulars ascertain the bank balance as per the cash book of Naveed & on 31st March 2015 a) Bank balance as per pass book on 31"March 2015 was Rs. 80000 b) Cheques paid into Bank on 26th March 2015 but not collected prior to 31st March 2015 amount to Rs 20,000 c) Interest on deposits of Rs. 2,000 was credited in the pass book but not recorded in the Cash Book till 31st March 2015. d) A customer paid into the bank Rs. 15,000 directly as appeared in the pass book but not in the Cash Book e) Dividend money of Rs. 8,000 on the shares held by Naveed & Co. was received directly by the bank on 29 March 2015 but the intimation was sent to them on 29 April 2015.

Question 32

Prepare a Bank Reconciliation Statement from the following particulars: a) Overdraft balance as per the Pass Book (Dr.) on 31-12-2015 Rs. 5,000. b) Interest on overdraft charged by the bank for half year Rs. 275 debited in the Pass Book only. c) Two cheques for Rs. 7,500 and Rs. 5,000 paid in on 30th December 2015 were not credited Cash Book Debit Credit xxxx 275 xxxx xxxx xxxxx xxxx 2000 by the bank. d) Two cheques for Rs. 1,050 and Rs. 4,000 issued in December 2015 had not been presented at the bank during the month. e) A cheque for Rs. 2,000 entered in the cash book (debit side) was not sent to the bank for collection.

Question 33

trader has two Bank Account — A/c No. 1 and A/c No. 2. The following particulars relating to A/c No. 1 are available on 31st March 2015. Prepare a bank reconciliation statement as on 31st March 2015: (1) Pass Book balance (overdrawn) Rs. 30,000. (2) Cheques drawn prior to 31" March 2015 but not presented as yet Rs. 8,000. (3) Interest debited by the bank but not entered in the Cash Book as yet Rs. 800. (4) Transfer from A/c No. 2 to A/c No. 1 recorded by the Bank on 31st March but not entered in the Cash Book Rs. 6,000. (5) Bank Charges debited by the bank but not recorded in the Cash Book as yet Rs. 20. Cash Book

Question 34

A trader has two Bank Account — A/c No. 1 and A/c No. 2. The following particulars relating to A/c No. 1 are available on 31st March 2015. Prepare a bank reconciliation statement as on 31st March 2015: (1) Pass Book balance (overdrawn) Rs. 30,000. (2) Cheques drawn prior to 31" March 2015 but not presented as yet Rs. 8,000. (3) Interest debited by the bank but not entered in the Cash Book as yet Rs. 800. (4) Transfer from A/c No. 2 to A/c No. 1 recorded by the Bank on 31st March but not entered in the Cash Book Rs. 6,000. (5) Bank Charges debited by the bank but not recorded in the Cash Book as yet Rs. 20. Cash Book Debit Credit 6000 xxxxx 800 20

Question 35

On 31" January 2023, a trader's cash book showed an overdraft of Rs. 2.000 at the bank. On reference to the book the following items were noted, prepare bank reconciliation statement: a) Interest amounting to Rs. 150 had been credited by the Bank in the pass book only. b) Bank charges amounting to Rs. 25 had been debited by the bank in the pass book only. c) An outstation cheque for Rs. 155 banked on 29thJanuary but not yet been collected. d) Cheques drawn totaling Rs. 95 had not been presented at the Bank for payment. e) The credit side of the cash book was under cast by Rs. 100. Cash Book Debit Credit 150 2000 25 xxxx 100

Question 36

On 30th June 2023 the Cash Book of Mr. Zubair showed an overdraft balance of Rs. 16,000. This balance did not agree with the balance as per the pass book. On comparing the two books, the discrepancies were noted. Prepare a bank reconciliation statement with the help of revised cash book: 1. Cheques for Rs. 4,000 paid into the bank for collection on 28th June 2015 have not yet been collected. 2. Cheques for Rs. 3,000 issued on 26" June 2015 have not yet been presented for payment. 3. An amount of Rs. 600 for Interest on overdraft was debited in the pass book but was intimated to Mr. Zubair on 24 July 2015. 4. Collection charges of Rs. 14 were entered in the Pass book but not in the cash book. 5. Mr. Zubair paid into his bank account in cash an amount of Rs. 2,000 but it was wrongly credited to Mr. Yousaf's account by bank. 6. On 30th June 2015 the bank received interest of Rs. 1,500 from a company on Mr. Zubair's deposits with that company but not recorded in cash book.

Question 37

A trader prepares at the end of each month, a Bank Reconciliation Statement for his business Draft one such statement from under mentioned items as on 31-12-2023 with the help of revised cash book: 1. On 26th December cheques were issued in favor of creditors for Rs. 19,000 but out of them two cheques for Rs. 14,000 were encashed on 3 January 2024. 2. One customer had deposited directly into the bank Rs. 2,500 but it was not mentioned in the Cash Book 3. The trader had withdrawn from the bank Rs. 7,000 but the same had not been entered in the Cash Book. 4. On 29th December a cheque for Rs. 6,000 was received and entered in the Cash Book but had been omitted to be sent to the bank. 5. On 27th December 2023 Rs. 350 were credited in the Pass Book as interest on deposits but the same had been recorded in the Cash Book on 31st December 2023. 6. Bank balance as per the Cash Book Rs. 40,000.

Question 38

From the following particulars prepare Bank reconciliation Statement of Mr. Irfan as on 31st March 2023 with the help of a revised cash book: (a) Bank overdraft as per the Cash Book Rs. 12,000. (b) Rs. 40,000 worth of cheques was sent for collection and only Rs. 25,000 worth of cheques were collected up to 31st March. (c) Out of cheques for Rs. 30,000 issued in March. Cheques of Rs. 18,000 were presented for payment. (d) Bills discounted with the bank and dishonoured Rs. 30,000. (e) A cheque for Rs. 5,000 entered in Cash Book (debit Side) was not sent to the Bank for collection. (f) Discount received Rs. 250 was entered in the Bank Column erroneously.