Cash book and bank reconciliation statement

Question 1

What is the main cash book?

Answer 1

A record used by businesses to track cash AND bank transactions.

Question 2

What’s on the debit side of the main cash book?

Answer 2

Money received.

Question 3

What’s on the credit side of the main cash book?

Answer 3

Money paid out.

Question 4

Is discount allowed Dr or Cr?

Answer 4

Dr.

Question 5

Is discount received Dr or Cr?

Answer 5

Cr.

Question 6

What does the bank recociliation statement do?

Answer 6

It compares the closing balance on the bank column for the cash book and bank statement, explaining any differences.

Question 7

What is the purpose of the bank reconciliation statement?

Answer 7

To ensure that the cash book is up to date and accurate and to detect any errors.

Question 8

Why might there be errors in a bank reconciliation statement?

Answer 8

Because of missing transactions and timing differences.

Question 9

Are outstanding lodgements Dr or Cr?

Answer 9

Dr.

Question 10

Are unpresented cheques Dr or Cr?

Answer 10

Cr.