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CBSE Questions for Class 10 Elements Of Book Keeping And Accountancy Bank Reconciliation Statement Quiz 4 - MCQExams.com
CBSE
Class 10 Elements Of Book Keeping And Accountancy
Bank Reconciliation Statement
Quiz 4
Credit balance as per bank a/c implies_______.
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Cash balance
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Overdraft
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Excess of expenditure
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None of these
Explanation
The bank account maintained by the account holder in his books of accounts is usually an asset for him as balance shown in the bank account would be a receivable for him from the bank and hence usually shows a debit balance.
But whenever a reverse situation happens, such that the bank account becomes a liability for him and he has to pay the bank then, his bank account would reflect a credit balance which in other words would become a bank overdraft.
A bank reconciliation is a ____________________.
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formal financial statement that lists all of the a firm's bank account balances.
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merger of two banks that previously were competitors.
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statement sent monthly by a bank to a depositor that lists all deposits, cheques paid and other credits and charges to the depositor's account for the month.
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schedule that accounts for differences between a firm's cash balance as shown on bank statement and the balance shown in its personal ledger cash account.
Explanation
Whenever money is deposited in bank or withdrawn from bank it is recorded in two places.
The passbook maintained by the bank
The cash book (bank column ) maintained by the account holder.
These two books are opposites of each other which means if one shows credit balance then the other would reflect a debit balance of the exact same amount.
But due to reasons like timing differences the balances of both these books do not match. Now, it is not practical and feasible for the bank to reconcile the account balances of each and every account holder so, the account holder prepares a bank reconciliation statement for his account maintained in the bank.
The balance of cash book shows ____________.
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net income
0%
cash in hand
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net expenditure
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cash received
Explanation
Cash book is maintained to record the cash receipts and cash payments. So if we start with some cash balance in hand then add cash receipts and deduct cash expenses the balance figure what we get is the cash we have in the end.
Bank reconciliation statement is prepared to reconcile ___________.
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Difference in trial balance
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The balance of personal A/c
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Cash at bank as per cash book with balance as per bank statement
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Balance in suspense A/c
Explanation
Bank
reconciliation statement is a statement which to prepared to reconcile the cash and bank balance.
A Bank Reconciliation Statement is prepared with the help of ______________.
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bank statement and bank column of the cash book
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bank statement and cash column of the
cash book
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bank column and cash column of the
cash book
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none of the above
Explanation
To reconcile means to find out the differences if any between two or more things and eliminate it. Now, in case of any banking transactions for each deposit or withdrawal the entry is recorded at two places.
The pass book / bank statement maintained by the bank and
The bank column of the cash book maintained by the account holder.
These two books are opposites of each other which means if one shows credit balance then the other would reflect a debit balance of the exact same amount. But due to reasons like timing differences the balances of both these books do not match.
So, to reconcile the same a bank reconciliation statement is prepared. The aim while preparing a bank reconciliation statement is to take either pass book or cash book balance as the starting point, to add or deduct certain entries and reach the balance of the other book ie, if cash book balance is the starting point then after reconciling we should reach at pass book balance.
When a cheque received on a particular date is not deposited the same day into bank, it is entered in ________________.
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Cash column on the debit side
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Bank column on the debit side
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Cash column on the credit side
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Cash column on the debit side and credit side.
Explanation
When a cheque received is not deposited on the same day, it is taken in the cash account and when it is deposited in bank, then a contra entry is passed.
For example cheque received from Ram on 15th March is deposited on 18th March, following entries will be passed: 15/3 Cash A/c Dr.
A pass book is a copy of _________________ .
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a customers account in the banks books
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cash book relating to discount column
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cash book relating to cash column
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firms receipts and payments
Explanation
A passbook is a copy of customer's account in the bank's books. it is prepared by the bank and shows all the transactions of a customer like deposits, withdrawals, interest payment / receipt etc. with the bank from the point of view of the bank.
A bank reconciliation statement is prepared with the balance of __________ .
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cash book
0%
pass book
0%
either (A) or (B)
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neither (A) nor (B)
Explanation
To reconcile means to find out the differences if any between two or more things and eliminate it. Now, in case of any banking transactions for each deposit or withdrawal the entry is recorded at two places.
The pass book maintained by the bank and
The cash book maintained by the account holder.
These two books are opposites of each other which means if one shows credit balance then the other would reflect a debit balance of the exact same amount. But due to reasons like timing differences the balances of both these books do not match.
So, to reconcile the same a bank reconciliation statement is prepared. The aim while preparing a bank reconciliation statement is to take either pass book or cash book balance as the starting point, to add or deduct certain entries and reach the balance of the other book ie, if cash book balance is the starting point then after reconciling we should reach at pass book balance.
Unfavorable bank balance means ________________.
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credit balance in the cash book
0%
credit balance in the pass book
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debit balance in the cash book
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favorable balance in the cash book
Explanation
The cash book is a account statement as maintained by the account holder. So if the cash book reflects a credit balance it means that the account is in the nature of a creditor/payable for the account holder and it would be the opposite for the bank.
The pass book is a copy of the account statement as maintained by the bank. So if the pass book reflects a debit balance it means that the account is in the nature of a debtor/receivable 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 negative/unfavourable balance in his account in both the above situations whereas for the bank it would be the opposite.
When the balance as per Pass Book is the starting point, direct payments by bank are __________.
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added in the bank reconciliation statement
0%
subtracted in the bank reconciliation statement
0%
not required to be adjusted in the bank reconciliation statement
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None of the above
Explanation
When direct payments by bank are done , it leads to decrease in the pass book balance but these entries would not be entered in the bank column of the cash book and the later would show a higher balance.
So, when the balance as per pass book is the starting point, direct payments by bank are to be added in the bank reconciliation statement to reach the bank balance as per cash book.
Debit balance as per Cash Book of ABC Enterprises as on 31.3.2005 is 1,Cheques deposited but not cleared amount to 200 and Cheques issued but not presented ofThe bank allowed interest amounting 50 and collected dividend
50 on behalf of ABC Enterprises. Balance as per pass book should be _______ .
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0%
1,600
0%
1,450
0%
1,850
0%
1,550
A debit balance in the depositors Cash Book will be shown as _________.
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a debit balance on the Bank Statement
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a credit balance on the Bank Statement
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an overdrawn balance on the Bank Statement
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none of the above
Explanation
Balance as per cash book is opposite of passbook. Therefore,
A debit balance in the depositors Cash Book will be shown as
a credit balance on the Bank Statement.
When balance as per Cash Book is the starting point, interest charged by Bank is ____________.
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added in the bank reconciliation statement
0%
subtracted in the bank reconciliation statement
0%
not required to be adjusted in the bank reconciliation statement
0%
None of the above
Explanation
Interest charged by bank would lead to decrease in the bank balance but, it would not be entered in the cash book until and unless the account holder views it in his pass book.
So when the balance as per cash book is the starting, interest charged by bank is subtracted in the bank reconciliation statement to reach the pass book balance.
State whether True or False:
All transactions related to bank are recorded in the bank column of the cash book and these transactions are also recorded in the pass book by the bank.
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True
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False
Explanation
Cashbook is a book maintained by the businessman and a passbook is a book maintained by the bank, therefore, All transactions related to the bank are recorded in the bank column of the cash book by the trader
and these transactions are also recorded in the passbook by the bank.
When businessman takes money from bank out of its account it is known as _________.
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withdrawal
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deposit
0%
expenses
0%
liability
Explanation
The bank is a keeper of our money and safeguards it also paying an interest.
If any money is taken from the bank it is called 'withdrawal', which is the right of the account holder, to withdraw as per his wish within the limits as prescribed by the respective banks.
________ is a copy of the clients account in the bank's ledger.
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Cash book
0%
Pass book
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Cheque book
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Pay-in-slip book
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 balance it means that the account is in the nature of a debtor/receivable for the bank and it would be the opposite for the account holder. From his point of view he would be having a negative balance in his account and hence a liability/payable.
Unfavourable balance as per pass book means which of the following?
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Dr. balance in cash book.
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Cr. balance in pass book.
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Bank overdraft.
0%
None of the above.
Explanation
The cash book is a account statement as maintained by the account holder. So if the cash book reflects a credit balance it means that the account is in the nature of a creditor/payable for the account holder and it would be the opposite for the bank.
The pass book is a copy of the account statement as maintained by the bank. So if the pass book reflects a debit balance it means that the account is in the nature of a debtor/receivable for the bank and it would be the opposite for the account holder.
So if there is unfavourable balance as per pass book with respect to the account holder, it means that the pass book is showing a debit balance which is also known as bank overdraft.
Unfavourable balance as per cash book means which of the following?
Report Question
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Cr. balance in pass book.
0%
Dr. balance in cash book.
0%
Bank overdraft.
0%
None of the above.
Explanation
The cash book is an account statement as maintained by the account holder. So if the cash book reflects a credit balance it means that the account is in the nature of a creditor/payable for the account holder and it would be the opposite for the bank.
The pass book is a copy of the account statement as maintained by the bank. So if the pass book reflects a debit balance it means that the account is in the nature of a debtor/receivable for the bank and it would be the opposite for the account holder.
So if there is unfavourable balance as per cash book it means that the cash book is showing a credit balance which is also known as bank overdraft.
A debit balance in the depositor's cash book will be shown as ___________.
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a debit balance in the bank statement
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a credit balance in the bank statement
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an overdrawn balance in the bank statement
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none of the above
Explanation
A bank statement is an extract from bank ledger and hence it is to be read from bank's view point which shows a credit balance in the pass book.
It is the position of customer in bank records. So if a debit balance is shown in depositor's cash book an opposite position will be shown in the bank books i.e credit balance.
When businessman pays money to bank it is known as _________________.
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0%
withdrawal
0%
deposit
0%
expenses
0%
liability
Explanation
The bank is a keeper of our money and safeguards it also paying an interest.
If any money is paid to the bank which is not in a form of interest or penalty or any fees, it is a deposit which is payable by bank on demand.
When the balance as per pass book is the starting point, cheques not presented for payment are ________.
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0%
added in the bank reconciliation statement
0%
subtracted in the bank reconciliation statement
0%
ignored while preparing the bank reconciliation statement
0%
neither of the above
Explanation
Cheques not presented are those which have been drawn and entered as payment in the cash book but not yet been presented to the bank, so the pass book balance would be higher than the cash book balance.
Therefore, when the balance as per pass book is the starting point, cheques not presented are subtracted in the bank reconciliation statement.
The businessman prepares the _______ and the _______ is prepared by the bank.
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Pass book, Cash book
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Cash book, Pass book
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cash book, cash book
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Pass book, Pass book
Explanation
To record cash and bank transactions, every businessman prepares cash book with cash and bank columns in it and in correspondence to that bank maintain its customers' account in its books of account which is a passbook.
Therefore, cash book is prepared by businessman and passbook is prepared by the bank.
A Bank Reconciliation Statement is prepared with the help of ____________ .
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0%
bank statement and bank column of the cash book
0%
bank statement and cash column of the cash book
0%
bank column of the cash book and cash column of the cash book
0%
none of the above
Explanation
To reconcile means to find out the differences if any between two or more things and eliminate it. Now, in case of any banking transactions for each deposit or withdrawal the entry is recorded at two places.
The bank statement maintained by the bank and
The bank column of the cash book maintained by the account holder.
These two are opposites of each other which means if one shows credit balance then the other would reflect a debit balance of the exact same amount. But due to reasons like timing differences the balances of both these do not match.
So, to reconcile the same a bank reconciliation statement is prepared. The aim while preparing a bank reconciliation statement is to take either bank statement balance or balance of the bank column of cash book as the starting point, to add or deduct certain entries and reach the balance of the other book ie, if bank column of the cash book balance is the starting point then after reconciling we should reach at bank statement balance.
Favourable balance as per cash book means which of the following?
Report Question
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Cr. balance in cash book.
0%
Dr. balance in cash book.
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Bank overdraft.
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Dr. balance in pass book.
Explanation
The cash book is a account statement as maintained by the account holder. So if the cash book reflects a debit balance it means that the account is in the nature of a debtor/receivable for the account holder.
The debit side of the cash book indicates receipts whereas the debit side indicates payments/withdrawals. A favourable balance in this case would be where the receipts are more than the payments so as to say when the cash book shows a debit balance.
Which of the following is not the salient features of bank reconciliation statement?
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Reconciliation is done by the bankers.
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Reconciliation statement will help in finding the person doing any fraud.
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Any undue delay in the clearance of cheques will be shown up by the reconciliation.
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All of above.
Explanation
Bank reconciliation statement is a statement prepared by the bank account holder on a particular day to reconcile the bank balance as per cash book with the balance as per passbook showing entries causing the difference between the two balances.
Following are the features of bank reconciliation statement:
1. It is prepared by the customer i.e., holder of the account.
2.It contains a complete and satisfactory explanation of the difference in balance as per the cash book and passbook.
3.Normally it is prepared on closing date of accounts.
4.It is neither journal nor ledger.
A bank reconciliation statement is a _________.
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part of cash book
0%
part of financial statements
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part of pass book
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none of the above
Explanation
A Bank Reconciliation Statement is an independent statement prepared to reconcile the balance between the bank column of cash book and pass book.
It is neither a part of cash book nor pass book.
A Cash flow statement may be a part of financial statement but not Bank Reconciliation Statement.
A Bank Reconciliation Statement is prepared by __________.
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0%
Creditors
0%
Debtors
0%
Bank
0%
Account Holder
Explanation
Whenever money is deposited in bank or withdrawn from bank it is recorded in two places.
The pass book maintained by the bank
The cash book (bank column ) maintained by the account holder.
These two books are opposites of each other which means if one shows credit balance then the other would reflect a debit balance of the exact same amount. But due to reasons like timing differences the balances of both these books do not match.
Now, it is not practical and feasible for the bank to reconcile the account balances of each and every account holder so, the account holder prepares a bank reconciliation statement for his account maintained in the bank.
Which of the following is/are significance of Bank Reconciliation Statement?
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It highlights the causes of difference between the bank balance as per cash book and the balance as per pass book.
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It helps in finding out actual position of the bank balance.
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It reduces the chance of fraud by the staff dealing in cash.
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All of the above.
Explanation
Bank reconciliation statement- It is a statement prepared on a particular day to reconcile the bank balance as per cash book with the balance as per passbook showing entries causing the difference between the two balances.
Following are the significance of Bank reconciliation statement:
1.
Bank reconciliation statement helps in ensuring the accuracy of the balances shown by the cash book and pass book.
2.
Bank reconciliation statement helps in identifying the missing transactions which are not yet recorded.
3.
Bank reconciliation statement helps in updating the cash books of the company.
4.
Bank reconciliation statement helps in verifying the accounts as most companies use double-entry bookkeeping facility.
5.
Bank reconciliation statement helps in pointing out the mistakes in cash book and passbook.
A bank reconciliation statement is prepared by _________.
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0%
the bank
0%
the bank account holder
0%
the government
0%
all of the above
Explanation
Whenever money is deposited in bank or withdrawn from bank it is recorded in two places.
The pass book maintained by the bank
The cash book (bank column ) maintained by the account holder.
These two books are opposites of each other which means if one shows credit balance then the other would reflect a debit balance of the exact same amount. But due to reasons like timing differences the balances of both these books do not match.
Now, it is not practical and feasible for the bank to reconcile the account balances of each and every account holder so, the account holder prepares a bank reconciliation statement for his account maintained in the bank.
When debit balance as per cash book is the starting point, direct deposits by customers are __________.
Report Question
0%
added
0%
subtracted
0%
not required to the adjusted
0%
none of these
Explanation
Direct deposits by customers in the bank account leads to increase in the bank balance as per pass book but this entry would be entered in the cash book only after it is updated in the pass book and so the pass book balance would be higher.
Therefore, when debit balance as per cash book is the starting point, direct deposits by customers are added to reach the pass book balance
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