MCQExams
0:0:1
CBSE
JEE
NTSE
NEET
Practice
Homework
×
CBSE Questions for Class 10 Elements Of Book Keeping And Accountancy Bank Reconciliation Statement Quiz 3 - MCQExams.com
CBSE
Class 10 Elements Of Book Keeping And Accountancy
Bank Reconciliation Statement
Quiz 3
A bank reconciliation is prepared by the ___________.
Report Question
0%
Bank
0%
Creditors
0%
Business Entity
0%
Supplier
Explanation
A business entity maintains cash book for recording cash and bank transactions. The cash book serves the purpose of both the cash account and the bank account. It shows the balance of both at the end of a period.
Bank also maintains an account for each customer in its book. All deposits by the customer are recorded on the credit side of his/her account. A copy of this account is regularly sent to the customer by the bank. This is called 'Pass Book' or Bank Statement.
Sometimes the bank balances as shown by the cash book and that shown by the pass book/bank statement do not match. If the balances shown by the pass book is different from the balance shown in cash book, the business entity will have to identity the causes for such difference. It becomes necessary to reconcile them and for this a statement is prepared which is called the "Bank Reconciliation Statement."
A copy of customer's account in the ledger of the bank is called __________.
Report Question
0%
Pass Book
0%
Cash Book
0%
Advice
0%
Balance Statement
Explanation
Numerous accounts are maintained with the bank viz., current account, savings account,recurring account, etc.
A pass book with the customer is an extract from the ledger maintained by the bank comprising of all the transactions undertaken by the customers during a given period.
Normally the reconciliation statement is prepared at the end of _____________.
Report Question
0%
a day
0%
week
0%
year
0%
a month
Explanation
Preparing a bank reconciliation statement is a tedious task. In case of large companies the reconciliation takes place on a daily basis, but in case of majority of the companies reconciliation statement is prepared at the end of the month for ease of operations.
Credit balance in the pass book represents _________.
Report Question
0%
Overdraft
0%
Bank Balance
0%
Loan Borrowed
0%
Nil balance
Explanation
The pass book is a copy of the account statement as maintained by the bank. So if the pass book reflects a credit balance it means that the account is in the nature of a creditor/payable for the bank and it would be the opposite for the account holder.
So from the account holder's point of view he would be having a positive/favourable/bank balance in his account in both the above situations whereas for the bank it would be the opposite.
Entry in debit side of bank pass book implies ____________.
Report Question
0%
Cash withdrawn
0%
Cash/ cheque deposited in Bank
0%
Business Receipts
0%
Personal Receipts
Explanation
When cash is withdrawn from Bank the entry for the same is as follows :
Cash A/c. ........................... Dr.
To Bank A/c.
So the bank column of the cash book would be credited with the amount withdrawn, but as the pass book is an opposite record of the cash book, in the pass book the said entry for cash withdrawal would be debited.
Credit entry in pass book at any point of time means ___________.
Report Question
0%
Amount withdrawn from customers a/c
0%
Amount deposited in customer a/c
0%
Both A and B
0%
None of these
Explanation
The pass book is just a copy of the account statement as maintained by the bank. So if the pass book reflects a credit entry it means that the amount is in the nature of a liability/payable for the bank and it would be the opposite for the account holder. For example when a debtor directly deposits in the account holder/customer account ,the account holder's passbook would show a credit entry.
Bank reconciliation is prepared by _________.
Report Question
0%
Sole Proprietor concern
0%
Partnership firm
0%
Corporate bodies
0%
All the three
Explanation
A Bank Reconciliation Statement is a statement prepared to reconcile/tally the differences that appear between the bank statement or passbook and the firm's cashbook so that the difference thereof is ascertained. Bank reconciliation is prepared by sole proprietor concern, partnership firm and corporate bodies as all the businesses bank reconciliation statement for the following reasons:
1. To ascertain the balance reported by the company's cashbook is the correct amount.
2. Any errors made by the bank are discovered and corrective measures are taken.
3. Discover dishonoured checks and take corrective measures.
4. To rectify any errors present in the cashbook. If these errors are carried forward, it results in an incorrect income statement as well as incorrect balance sheet.
Debit entry in pass book at any point of time means _________.
Report Question
0%
Amount deposited by the customer
0%
Amount withdrawn by the customer
0%
Amount deposited in customers a/c
0%
Amount withdrawn/ deducted from customers a/c
Explanation
The pass book is just a copy of the account statement as maintained by the bank. So if the pass book reflects a debit entry it means that the amount is in the nature of a receivable/asset for the bank and it would be the opposite for the account holder. For example when monthly statement charges are charged by the bank to the account holder/customer account the account holder's passbook would show a debit entry.
Debit balance as per pass book means ____________.
Report Question
0%
Bank Overdraft
0%
Debit Balance in Pass Book
0%
Cash Balance with Bank
0%
None of these
Explanation
Bank statements usually show a debit balance which indicate a positive balance. Overdrafts are where the bank account becomes negative and the businesses in effect have borrowed from the bank. In the bank statement, where the balance is followed by Dr. (or sometimes OD) means that there is an overdraft and called debit balance as per passbook. An overdraft is treated as negative figure on a bank reconciliation statement.
Credit balance in bank pass book means ________.
Report Question
0%
bank overdraft
0%
bank Balance
0%
balance as per Cash book
0%
total of bank A/c
Explanation
The amount of balance shown in the passbook or the bank statement must tally with the balances shown in the cash book. But in practice, these are usually found to be different. Hence, we have to ascertain the causes for such difference. It will be observed that a bank statement/passbook shows all deposits in the credit column and withdrawals in the debit column. Thus, if deposits exceed withdrawals it shows a credit balance and if withdrawals exceed deposits it will show a debit balance (overdraft). The debit balance as per the cash book means the balance of deposits held at the bank. Such a balance will be a credit balance as per the passbook. Such a balance exists when the deposits made by the firm are more than its withdrawals. It indicates the favorable balance as per cash book or favorable balance as per the passbook. Hence, credit balance in the pass book means bank balance.
Which of these will require adjustment of cash book balance?
Report Question
0%
Overcasting bank column of cash book
0%
Cheque issued but not presented for payment
0%
Cheque deposited but not cleared
0%
Errors in Pass book
Explanation
Cheque issued but not presented for payment is not an error. It is a time difference. Similarly, Cheque deposited but not cleared is also a time difference and not an error. Thus, we do need to adjust the cash book balance.
Any error in the passbook is an error of bank and only the bank cab adjust it.
However, overcasting of the bank column of Cashbook is an error of cashbook which requires adjustment in the cash book balance.
Thus, the correct answer is A.
An amount of $$Rs. 2,500$$ is debited twice in the bank column of cash book. When credit balance as per pass book is the starting point which one of these adjustments would be done at the time of reconciliation?
Report Question
0%
Add $$Rs. 2,500$$ to balance as per pass book
0%
Deduct $$Rs. 2,500$$ to balance as per pass book
0%
Add $$Rs. 5,000$$ to balance as per pass book
0%
Deduct $$Rs. 5,000$$ to balance as per pass book
Explanation
When an amount is debited twice in the bank column of the cash book the pass book balance would be showing a lower balance so, in order to reconcile we would have to add the amount to the pass book balance.
Example:
Credit Balance as per passbook ........................................................... $$Rs. 5000$$
Add : Cheque received debited twice in cash book ........................$$Rs. 2500$$
Debit balance as per bank column of cash book ..............................$$Rs. 7500$$
Entry on credit side of bank pass book implies ___________.
Report Question
0%
cash withdrawn
0%
cash/cheque deposited in bank
0%
business expenses
0%
personal expenses
Explanation
Any entry on the credit side of the pass book implies that the asset of the account holder( the amount reflecting as his bank balance) has increased and the liability of the bank has increased simultaneously. Now, cash/cheque deposited in bank leads to increase in the bank balance of the account holder and hence would be shown on the credit side of the pass book.
Bank reconciliation statement is prepared to _________.
Report Question
0%
Reconcile bank balance as per pass book with balance as per cash book
0%
reconcile petty cash in hand with cash balance as per cash book
0%
reconcile total of debit side of cash book with credit side of bank pass book
0%
All the three
Explanation
A Bank Reconciliation Statement is a statement prepared to reconcile/tally the differences that appear between the bank statement or passbook and the firm's cashbook so that the cause of difference thereof is ascertained. Businesses need to prepare the bank reconciliation statement for the following reasons:
1. To ascertain the balance reported by the company's cashbook is the correct amount.
2. To rectify any errors present in the cashbook. If theses errors are carried forward, it results in an incorrect income statement as well as incorrect balance sheet.
3. More control over the recordings in the cashbook.
Unfavourable balance as per bank pass book means ___________.
Report Question
0%
bank overdraft
0%
debit balance in pass book
0%
debit balance in cash book
0%
both A and B
Explanation
The standard balance of cashbook is Dr. balance and the standard balance of passbook is Cr. balance i.e., Dr. balance of cashbook and Cr. balanced of passbook is considered as favorable balance. In case if passbook shows unfavorable balance then it would amount to either bank overdraft or debit balance in passbook.
Which of these statement is false?
Report Question
0%
Bank Reconciliation statement makes use of cash book.
0%
Bank Reconciliation statement is a memorandum statement.
0%
Bank Reconciliation statement is a part of Balance sheet.
0%
Bank Reconciliation statement is prepared to reconcile Cash at bank with Balance as per Bank pass book.
Explanation
A bank reconciliation statement :
is a statement used to reconcile cash book balance and pass book balance.
is a memorandum statement to used only for the internal reporting of the account holder/company.
uses cash book and pass book for its preparation.
Bank column of cash book showed bank balance of $$Rs. 8750$$. While reconciling the bank balance it was noticed that bank column of cash book was undercast by $$Rs. 90$$, bank draft charges of $$Rs. 50$$ and Telephone charges of $$Rs. 550$$ paid by the bank directly as per standing instruction were not accounted for in the Cash book. Find the adjusted balance of cash as per cash book.
Report Question
0%
$$9000$$
0%
$$8240$$
0%
$$8600$$
0%
$$8890$$
A cheque of $$Rs. 5000$$ in favour of Mr. X was wrongly credited by the bank in Mrs. X a/c as $$Rs. 550$$. While reconciling the bank balance of Mr. X, bank balance as per bank pass book will be _________.
Report Question
0%
short by $$Rs. 5000$$
0%
more by $$Rs. 5000$$
0%
short by $$Rs. 550$$
0%
more by $$Rs. 550$$
Explanation
When a cheque in favour of a person is credited by bank it leads to the increase in the account holder's bank balance. Now, here a cheque in favour of Mr. X of $$Rs. 5000$$ was wrongly credited to Mrs. X a/c as $$Rs. 550$$. This would lead to the bank balance as per pass book of Mr. X to be short by $$Rs. 5000$$ and the bank balance as per pass book of Mrs. X to be more by $$Rs. 550$$ .
Cash receipt of $$Rs. 5100$$ was wrongly posted to bank column of cash book as $$Rs. 510$$. Bank balance as per cash book will be ________.
Report Question
0%
more by $$Rs. 510$$
0%
more by $$Rs. 5100$$
0%
less by $$Rs. 510$$
0%
$$Rs. 5100$$
Explanation
Cash receipt is to entered in the cash column of the cash book and no entry of this would be shown in the pass book as the bank balance is not affected due to this transaction. But, here cash receipt of $$Rs. 5100$$ was wrongly posted in bank column of the cash book as $$Rs.510$$ which would result in cash book showing a bank balance more by $$Rs. 510$$ .
A cheque of $$Rs. 5000$$ in favour of Mr. X was wrongly credited by the bank in Mrs. X a/c as $$Rs. 550$$. While reconciling the bank balance of Mr. X, bank balance as per cash book will be __________.
Report Question
0%
Short by $$Rs. 5000$$
0%
More by $$Rs. 5000$$
0%
Short by $$Rs. 550$$
0%
More by $$Rs. 550$$
Explanation
The cheque was wrongly credited in Mrs X a/c as Rs. 550. This implies that the amount of Rs. 5000 was not added to Mr X's Bank account. Thus, his account will show a short balance by Rs. 5000. However, while reconciling the bank balance of Mr X, we won't consider the wrong credit to Mrs X's a/c.
Thus, the correct answer is short by
Rs. 5000.
Cash receipt of $$Rs. 5100$$ was wrongly posted to credit side bank column of cash book as $$Rs. 510$$. bank balance as per cash book will be ________.
Report Question
0%
More by $$Rs. 510$$
0%
More by $$Rs. 5100$$
0%
Less by $$Rs. 510$$
0%
$$Rs. 5100$$
Explanation
Cash receipt is to entered on the debit side of the cash column in the cash book and no entry of this would be shown in the pass book as the bank balance is not affected due to this transaction. But, here cash receipt of $$Rs. 5100$$ was wrongly posted on the credit side of the bank column in the cash book as $$Rs.510$$. Any entry on the credit side of the bank column in the cash book indicates payment through bank balance, so the error occurred here would lead to the bank balance as per cash book being less by $$Rs. 510$$ .
If we take balance as per cash book, _________ will be added to get balance as per pass book.
Report Question
0%
interest given by bank
0%
interest charged by bank
0%
cheque deposited but not cleared
0%
payments made by the bank as per standing instructions
Explanation
Entry of interest given by bank would be first entered in the pass book by the bank and only after that the account holder would be able to enter the same in the cash book, so at this given point of time the pass book balance would be higher than cash book . Interest given by the bank is an income to the account holder. So, if the balance as per cash book is the starting point then we would have to add interest given by bank to reach the pass book balance.
Which of these statements is true about a bank pass book?
Report Question
0%
Pass book contains a copy of bank column of the customer's cash book
0%
Pass book is a copy of customer's account in bank's books
0%
Pass book contains a copy of cash column of customer of cash book
0%
Pass book contains a copy of Customers current account in cash book
Explanation
The cash book also serves the purpose of both the cash account and the bank account and shows the balance of both at the end of the period. Once the cash book has been balanced, it is usual to check its details with the records of the firm's bank transactions as recorded by the bank. To enable this check, the cashier needs to ensure that the cash book is completely up to date and a recent bank statement (or a bank passbook) has been obtained from the bank. A bank statement or a bank passbook is a copy of a bank account as shown by the bank record. This enables the bank customers to check their funds in the bank regularly and update their own record of transactions that have occurred.
The cash book shows a balance of $$Rs. 11,000$$ which was different from the pass book balance. The difference is found to be due to a credit entry in pass book amounting to $$Rs. 2,000$$ for direct payment by a customer and a debit of $$Rs. 250$$ for bank charges on collection of outstation cheques and other services. What would be the balance as per bank pass book?
Report Question
0%
$$Rs. 12,750$$
0%
$$Rs. 12,250$$
0%
$$Rs. 13,750$$
0%
$$Rs. 3,600$$
Explanation
The reconciliation of cash book and pass book balance is as follows :
Particulars
Amount in Rs.
Balance as per cash book
$$11000$$
Add
Direct payment by customer
$$2000$$
Less
Bank Charges
$$250$$
Balance as per pass book
$$12750$$
Bank Reconciliation Statement is prepared to ascertain the causes of the difference between ________________ and ______________.
Report Question
0%
the balance as per the bank column of the cash book, the balance as per pass book
0%
the balance as per the cash column of cash book, the balance as per the pass book
0%
cash, bank column in the cash book
0%
none of the above
Explanation
Bank reconciliation statement is an exercise to ascertain the difference between the bank statements and cash book maintained by the business.
However, any discrepancies in cash column as per the cash book shall not be reflected since only bank column of the cash book is considered vis-a-vis the pass book in preparing Bank reconciliation statement.
Which of the following accounts is increased by credit entries?
Report Question
0%
Bank overdraft
0%
Purchase account
0%
Goodwill account
0%
Sales return account
Explanation
Purchase account has a debit balance being an expenditure and any credit entries would lead to decrease in the purchase amount.
Goodwill account has a debit balance being an asset and any credit entries would lead to decrease int he goodwill amount.
Sales return account has a debit balance as this account is used to record the items returned in sales. Sales has a credit balance so to reduce it, the sales return entries must be debited and hence sales return has debit balance. Any credit entries to the sales return account would lead to increase in the amount.
Bank overdraft has a credit balance as it is a liability, any credit entries would lead to increase in the overdraft amount.
A Bank Reconciliation Statement is prepared by _________.
Report Question
0%
Creditors
0%
Debtors
0%
Business
0%
Any of these
Explanation
A bank reconciliation statement is generally prepared by the company accountant or book keeper to reconcile the closing balance of cash book (bank column) in own records as per the bank's records (pass book). Thus, it is prepared by the account holders or customers i.e business and not the bankers. It is normally prepared at the end of the month.
A bank reconciliation statement is prepared with the balances of ________.
Report Question
0%
cash book
0%
pass book
0%
either cash book or pass book
0%
both cash book and pass book
Explanation
Bank Reconciliation statement is prepared in order to reconcile the balance as per the bank pass book and balance as per the cash account maintained by the business in the form of cash book after taking into
consideration other aspects like cheques issued but not presented for payment, cash in transit, cheque in transit, etc.
When balance as per passbook is starting point,cheque issued but not presented for payment are ____ for the purpose of reconciliation of balance with cash book
Report Question
0%
Deducted from cash as per cash book
0%
Added to the cash as per cash book
0%
Deducted from balance as per bank passbook
0%
Kept in abeyance for some time
Debit balance as per cash book means _________.
Report Question
0%
Cash Balance
0%
Overdraft
0%
Excess of Expenditure
0%
None of these
Explanation
When we say that cash book has a debit balance it means that the debit side of the cash book is more than the credit side. On the debit side we record cash receipts and on the debit side we record cash payments. So if there is a debit balance as per cash book then it means there is cash balance with us.
0:0:1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
0
Answered
0
Not Answered
0
Not Visited
Correct : 0
Incorrect : 0
Report Question
×
What's an issue?
Question is wrong
Answer is wrong
Other Reason
Want to elaborate a bit more? (optional)
Practice Class 10 Elements Of Book Keeping And Accountancy Quiz Questions and Answers
<
>
Support mcqexams.com by disabling your adblocker.
×
Please disable the adBlock and continue.
Thank you.
Reload page
