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11th Standard Accountancy - Bank Reconciliation Statement Three Marks Questions

Published on: 09/10/2019

Bank Reconciliation Statement

Download Tamil Nadu 11th Standard Accountancy question papers, model tests, one-mark questions, important questions, and public exam papers in PDF format. Free study materials and answer keys for TN State Board students.

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Questions:

Generic 3

10 x 3 = 30

In the following illustration, what will be the cash book balance, if the balance as per bank statement is favourable?

	Particulars	Amount Rs
(i)	Overdraft balance as per bank statement	6500
(ii)	Cheque deposited into the bank but not yet credited	10,500
(iii)	Cheques issued, but not yet presented for payment	3,000
(iv)	Wrong debit by the bank	500
(v)	Interest and bank charges debited by bank	180
(vi)	Insurance premium on goods directly paid by the bank as per standing instructions	10

From the following information, prepare bank reconciliation statement as on 31st December, 2017 to find out the balance as per bank statement.

	Particulars	Rs
(i)	Balance as per bank statement	6,000
(ii)	Cheques deposited on 28^thDecember, 2017 but not yet credited	2,000
(iii)	Cheques issued for 10,000 on 20^th December, 2017 but not yet presented for payment	3,000
(iv)	Interest on debentures directly collected by the bank not recorded in cash book	4,000
(v)	Insurance premium on building directly paid by the bank	1,000
(vi)	Amount wrongly credited by bank	500

Prepare bank reconciliation statement as on 31^st December 2017 from the following information:
(a) Balance as per bank statement (pass book) is Rs.25,000.
(b) No record has been made in the cash book for a dishonour of a cheque for Rs.250.
(c) Cheques deposited into bank amounting to Rs.3,500 were not yet collected.
(d) Bank charges of Rs.300 have not been entered in the cash book.
(e) Cheques issued amounting to Rs.9,000 have not been presented for payment.

Rony is the proprietor of Veena photos. The bank column of cash account of his business was balanced on 31^st March 2018. It showed an overdraft of Rs.12,000. The bank statement of Veena photos showed a credit balance of Rs.5,000. Prepare a bank reconciliation statement taking the following into account.
(a) The bank had directly collected dividend Rs.3,000 but was not entered in the cash book.
(b) Cheques amounting to Rs.9,000 were issued on 27^th March 2018, of which, cheques amounting to Rs.7,000 were not presented for payment before 31^st March 2018.
(c) Cheque book charges of Rs.200 debited by the bank but not recorded in cash book.
(d) Bank locker rent of Rs.1,000 debited by the bank but not recorded in cash book.

From the following information, prepare bank reconciliation statement as on 31^st December, 2017 to find out the balance as per bank statement.

	Particulars	Rs
(i)	Overdraft as per cash book	10,000
(ii)	Cheques deposited but not yet credited	5,000
(iii)	Cheque issued but not yet presented for payment	1,000
(iv)	Payment received from the customer directly by the bank	500
(v)	Interest on overdraft debited by bank	1,000
(vi)	Amount wrongly debited by bank	300

State the timing differences in BRS with examples.

What will be the effect of interest charged by the bank, if the balance is an overdraft?

Explain why does money deposited into bank appear on the debit side of the cash book, but on the credit side of the bank statement?

What is meant by the term "cheque not yet presented?"

10.

Give any three reasons for preparing bank reconciliation statement.

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Answers Key:

Generic 3

10 x 3 = 30

**Bank reconciliation statement as on 31st December, 2017**
Particulars	Amount Rs	Amount Rs
Balance as per bank satement		6,500
Add: Cheque deposited into bank but not credited	10,500
Wrong debit by the bank	500
Intent and bank charges debited by the bank	180
Insurance premium directly paid by the bank as per standing order	100	11,280
		17,780
Less: Cheques issued but not yet presented for payment	3,000	3,000
Balance as per cash Book		14,780

Bank reconciliation statement as on 31st December, 2017
Particulars	Amount Rs	Amount Rs
Balance as per bank statement		6,000
Add: Cheque deposited but not yet credited	2,000
Insurance premium on building directly paid by the bank	1,000	3,000
		9,000
Less: Cheque issued but not yet presented for payment	3,000
Interest on debentures directly collected by the bank not entered in cash book	4,000
Amount wrongly credited by bank	500	7,500
Balance as per cash book		1,500

Bank reconciliation statement as on 31^st December, 2017
Particulars	Amount Rs	Amount Rs
Balance as per bank statement		25,000
Add: Dishonour of a cheque	250
Cheques deposited into bank, but not yet collected	3,500
Bank charges not entered in the cash book	300	4,050
		29,050
Less: Cheques issued, but not presented for payment		9,000
Balance as per cash book		20,050

Bank reconciliation statement ofVeena photos as on 31^st March, 2018
Particulars	Amount Rs	Amount Rs
Overdraft as per cash book		12,000
Add: Cheque hook charges not recorded in cash book	200
Bank locker charges debited by bank	1,000	1,200
		13,200
Less: Dividend directly collected by the bank	11,200
Cheque issued but not yet presented for payment	7,000	18,200
Favourable balance as per bank statement		-5,000

Note: Since the balance obtained is negative, it is favourable balance.

Bank reconciliation statement as on 31st December, 2017
Particulars	Amount Rs	Amount Rs
Overdraft as per cash book		10,000
Add: Cheques deposited but not yet credited	5,000
Interest on overdraft debited by bank	1,000
Amount wrongly debited by bank	300	6,300
		16,300
Less: Cheque issued but not yet presented for payment	1,000
Payment received from the customer directly by the bank	500	1,500
Overdraft balance as per bank statement		14,800

(a) Cheques issued but not yet presented for payment: When the cheques are issued by the business, it is immediately entered on the credit side of the cash book by the business. But, this may not be entered in the bank statement on the same day. It will be entered in the bank statement only after it is presented with the bank.
For example, the balances as per cash book and bank statement are Rs. 20,000 for X & Co. X & Co. issued a cheque in favour of Y & Co for Rs. 10,000, on 27^th March 2017. So, X & Co's cash book is credited with Rs. 10,000 on 27^th March 2017.
(b) Cheques deposited into bank but yet credited: When the cheques are deposited into bank, the amount is debited in the cash book on the same day. But, these may not be shown in the bank passbook on the same day because these will be entered in the bank statement only after the collection of the cheques.
For example, the balances as per cash book and bank statement are Rs. 20,000 for X & Co. X & Co. receives a cheque on 25^th March 2016, from ABC Limited for Rs. 5,000. On the same day, X & Co, debits its cash book with Rs. 5,000.
(c) Bank charges and Interest on loan and overdraft by the bank: The bank has to cover the cost of running the customer's account. So debit is given to the account of the business towards bank charges.
For example, the opening balance as per cash book and the bank statement as on 1^st March 2017 is Rs. 7,000. Bank debits for bank charges Rs. 300 as on 27th March 2017. But there is no entry for the same in the cash book as on such date.

(i) The bank has to cover the cost of running the customer's account. So debit is given to the account of the business towards bank charges.
(ii) Also, if the business had taken any loan or overdrawn, interest has to be paid by the business.
(iii) These entries for bank charges and interest are made in the bank statement.
(iv) But, the entry is made in the cash book only when the bank statement is received by the business.
(v) Till then, the cash book shows more balance than bank statement.

(i) The debit balance as per the cash book means the balance of deposits held at the bank.
(ii) Such a balance will be a credit balance as per the passbook.
(iii) Such a balance exists when the deposits made by the firm are more than its withdrawals.
(iv) It indicates the favourable balance as per cash book or favourable balance as per the passbook.
(v) In other words, the excess amount withdrawn over the amount deposited in the bank. It is also known as unfavourable balance as per cash book or unfavourable balance as per pass book.

(i) When the cheques are issued by the business, it is immediately entered on the credit side of the cash book by the business.
(ii) But, this may not be entered in the bank statement on the same day.
(iii) It will be entered in the bank statement only after it is presented with the bank.
(iv) It is also known as an outstanding cheque.

10.

(i) To identify the delay in the clearance of cheques.
(ii) To ascertain the correct balance of bank column of Cash book.
(iii) To discourage the accountants of the business as well as bank from misusing funds.