11th Standard English Medium Accountancy Subject Bank Reconciliation Statement Creative 3 Mark Questions with Solution Part - II updated Creative Questions | QB365

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11th Standard English Medium Accountancy Subject Bank Reconciliation Statement Creative 3 Mark Questions with Solution Part - II updated Creative Questions

Published on: 13/05/2022

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chapter: - Creative Questions

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Questions:

Generic 3

5 x 3 = 15

Remember, an item entered on the debit side of cash book is entered on the credit side of bank statement and vice-versa: Now, keep this in mind, think on the following:
Is it possible to prepare bank reconciliation statement with bank statement as starting point and ascertain the cash book balance? Prepare a specimen of bank reconciliation statement with balance as per bank statement as the starting point.

Observe the above format. Why the withdrawals are shown as debit and deposits are shown as credit in a bank statement?

Imagine that you are the owner of a small shop. You maintain the three column cash book for your business. Now, think on the following points and discuss with the whole class:
• How often would you check your cash balance in hand? Everyday/once in a week?
• Why do you check your cash balance?
• How will you make sure that the bank column in cash book is correct and is the same as shown by the bank statement?

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

	Particulars	Rs
(i)	Cheques deposited but not yet collected by the bank	500
(ii)	Cheque issued but not yet presented for payment	1,000
(iii)	Bank interest charged	100
(iv)	Rent paid by bank as per standing instruction	200
(v)	Cash book balance	300

What are the causes of difference between bank column of the cash book and bank statement?

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Answers Key:

Generic 3

5 x 3 = 15

Yes, it is possible to prepare bank reconciliation statement with bank statement as starting point and ascertain the cash book balance

Particulars	Amount Rs	Amount Rs
Balance as per bank satement		XXX
Add: Cheque deposited but not yet collected	XXX
Bank charges not tered in the cash book	XXX	XXX
		XXX
Less: Cheques issued but not yet presented for payment	XXX
Interest on investment directly collected by the bank but not entered in the cash book	XXX	XXX
Balance as per cash book

The credit balance in the bank pass book represents the debit balance as per the cash book and vice-versa. This is because bank is a debtor for the business and business unit (customer to the bank) is a creditor for the bank when there is a favourable balance in the bank. When money is deposited by the business into the bank, customers account is credited in the bank sbook, as this is the amount owed by the bank to its customer. Similarly, when the money is withdrawn or taken out of the bank by the business, customer's account is debited as this decreases the amount owed by the bank to the customer. As a result of this, favourable balance, as per-bank statement (bank pass book), will appear as a credit balance and overdrawn balance as a debit balance.

We can check cash balance in hand daily alow because such informations received in the business.
• When we check the cash balance, the difference between cash balance and bank balance statement must be known by the business concern.
• We can not make sure that the bank column in cash book in correct and is the same as shown the bank statement. Because the three column cash bank is maintained by the cashier of the business. But the bank statement is maintained by the Banker. No Both will not be recorded as a time. No the difference may be occured. For this purpose of difference, the bank reconciliation statement is prepaned.

Bank reconciliation statement as on 31^st March, 2017
Particulars	Amount Rs.	Amount Rs.
Balance as per cash book		300
Add: Cheque issued but not yet presented for payment		1,000
		1,300
Less: Cheques deposited but not yet collected by the bank	500
Bank interest charged	100
Rent paid by bank as per standing instruction	200	800
Balance as per bank statement		500

Difference between these two records are as follows:
(i) Timing differences:
(a) Cheque issued but not presented for payment.
(b) Cheque deposited into bank but not yet credited.
(c) Bank charges and interest on loan/overdraft
(d) Interest and dividends collected by the bank.
(e) Dishonour of cheques and bills.
(f) Amount paid by the parties directly into the bank
(g) Payment made directly by the bank to others.
(h) Bills collected by the bank on behalf of its customers.
(ii) Error in casting:
(a) Errors committed in recording the transactions by the business in the cash book.
(b) Errors committed in recording the transactions by the bank.