Based on the Bank Reconciliation Statement, some of the important questions are covered in this question paper. The questions are prepared from the book back and PTA question.

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Questions:

Multiple Choice Question

15 x 1 = 15

A bank reconciliation statement is prepared to know the causes for the difference between:

(a)

The balance as per the cash column of the cash book and bank column of the cash book

(b)

The balance as per the cash column of the cash book and bank statement

(c)

The balance as per the bank column of the cash book and the bank statement

(d)

The balance as per petty cash book and the cash book

When balance as per Cashbook is the starting point to ascertain balance as per Pass book interest charged by bank is__________________

(a)

added

(b)

subtracted

(c)

not adjusted

(d)

none of these

When balance as per Cash book is the starting point, to ascertain balance as per Pass book interest allowed by bank is______________

(a)

subtracted

(b)

added

(c)

not adjusted

(d)

adjusted

_______________can be prepared either from the balance as per cash book or bank statement.

(a)

Bank reconciliation statement

(b)

Financial Statement

(c)

Fund flow analysis

(d)

None of these

___________is not possible to have unfavourable cash balance in the cash book.

(a)

Bank statement

(b)

Bank overdraft

(c)

Cash overdraft

(d)

Cash book

________________can also be made through bank

(a)

Payments

(b)

Receipts

(c)

Both

(d)

None of these

Which one of the following is not a timing difference?

(a)

Cheque deposited but not yet credited

(b)

Cheque issued but not yet presented for payment

(c)

Among directly paid into the bank

(d)

Wrong debit in the cash book

Balance as per bank statement is Rs. 1,000. Cheque deposited, but not yet credited by the bank is Rs. 2,000. What is the balance as per bank column of the cash book?

(a)

Rs. 3,000 overdraft

(b)

Rs. 3,000 favourable

(c)

Rs. 1,000 overdraft

(d)

Rs. 1,000 favourable

Balance as per cash book is Rs. 2,000. Bank charge of Rs. 50 debited by the bank is not yet shown in the cash book. What is the bank statement balance now?

(a)

Rs. 1,950 credit balance

(b)

Rs. 1,950 debit balance

(c)

Rs. 2,050 debit balance

(d)

Rs. 2,050 credit balance

10.

Which of the following is not the salient feature of bank reconciliation statement?

(a)

Any undue delay in the clearance of cheques will be shown up by the reconciliation

(b)

Reconciliation statement will discourage the accountant of the bank from embezzlement

(c)

It helps in finding the actual position of the bank balance

(d)

Reconciliation statement is prepared only at the end of the accounting period

11.

A bank reconciliation statement is prepared to know the causes for the difference between:

(a)

The balance as per the cash column of the cash book and bank column of the cash book.

(b)

The balance as per the cash column of the cash book and bank statement

(c)

The balance as per the bank column of the cash book and the bank statement.

(d)

The balance as per petty cash book and the cash book

12.

A bank statement is a copy of _______.

(a)

Cash column of the cash book

(b)

Bank column of the cash book

(c)

A customer's account in the bank's book

(d)

Cheques issued by the business

13.

Debit balance in the bank column of the cash book means _______.

(a)

Credit balance as per bank statement

(b)

Debit balance as per bank statement

(c)

Overdraft as per cash book

(d)

None of the above

14.

A bank reconciliation statement is prepared with the help of ______.

(a)

Bank statement

(b)

Cash book

(c)

Bank statement and bank column of the cash book

(d)

Petty cash book

15.

A bank reconciliation statement is prepared by ______.

(a)

Bank

(b)

Business

(c)

Debtor to the business

(d)

Creditor to the Business

Generic 2

5 x 2 = 10

16.

On 3^rd, December, Magesh issued his savings bank account cheque for his personal expenses amounting to Rs. 2,500, but Dinesh assumed this as current account cheque and the same was entered in the cash book as drawings.

17.

Who prepares a bank statement?

18.

Give any two expenses which may be paid by the banker as per standing instruction.

19.

State any two causes of disagreement between the balance as per bank column of cash book and bank statement.

20.

What is bank reconciliation statement?

Generic 3

5 x 3 = 15

21.

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.

22.

State the timing differences in BRS with examples.

23.

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

24.

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?

25.

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

Generic 5

2 x 5 = 10

26.

The cash book of Dhandapani showed an overdraft of Rs. 15,000. The cash book entries were checked with the entries in the pass book. The following details were disclosed. Prepare a Bank reconciliation statement to show the Bank Balances as per pass book as on 30^th June, 2013.
a) Out of the four cheques issued on 27^th June, 2013 for Rs. 21,000, two cheques for Rs. 12,000 alone were presented for payment on 29^th June, 2013.
b) Cheques paid into the Bank amounted Rs. 17,800. But the Bank had not cashed and credited in the pass book before that date.
c) There was an entry on the debit side of the pass book for bank charges, Rs. 150.
d) The Bank had also debited the account for interest on O/D for Rs. 280.
e) It was also noticed that the Bank had paid Rs. 2,750 as insurance premium as per standing instructions on 29^th June, 2013.

27.

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

Particulars	Rs
1. Balance as per cash book	15,000
2. Cheques deposited but not yet credited	1,000
3. Cheques issued and entered in the cash book before 31st December 2017 but not presented for payment until that date	1,500
4. Dividend directly received by bank	200
5. Direct payment made by bank for rent	1,000
6. Locker rent charged by the bank not recorded in cash book	1,200
7. Wrong debit given by the bank on 30th December 2017	500
8. A payment made through net banking has been entered twice in the cash book	300

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Answers Key:

Multiple Choice Question

15 x 1 = 15

(b)
subtracted

(b)
added

(a)
Bank reconciliation statement

(b)
Bank overdraft

(a)
Payments

(d)
Wrong debit in the cash book

(b)
Rs. 3,000 favourable

(a)
Rs. 1,950 credit balance

10.

(d)
Reconciliation statement is prepared only at the end of the accounting period

11.

12.

13.

(a)
Credit balance as per bank statement

14.

15.

(b)
Business

Generic 2

5 x 2 = 10

16.

Over casting of debit side of bank column of the cash book is Rs. 1800.

17.

The bank passbook or the bank statement of accounts is prepared by the bank

18.

(i) Insurance Premium
(ii) Telephone Bills

19.

Causes of disagreement between the balances shown by the cash book and bank statement.
(i) Cheques issued but not yet presented for payment.
(ii) Cheques paid into bank for collection but not yet collected.

20.

(i) If entry in the cash book matches with the bank statement, then bank balance will be the same in both the records.
(ii) But, practically it may not be possible. When the balances do not agree with each other, the need for preparing a statement to explain the causes arises. This statement is called bank reconciliation statement (BRS).

Generic 3

5 x 3 = 15

21.

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

22.

(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.

23.

(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.

24.

(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.

25.

(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.

Generic 5

2 x 5 = 10

26.

In the books of Mr. Dhandapani Bank Reconciliation Statement as on 30.06.2003
Particulars	Amount Rs	Amount Rs
Overdraft balance as per cash book		15,000
Add: Cheques paid into bank but not cashed	17,800
Bank charges	150
Interest on bank overdraft	280
Insurance premium paid by bank as per standing instructions	2,750	20,980
		35,980
Cheques issued but not presented		9,000
Overdraft balance as per pass book		26,500

27.

Bank Reconciliation Statement of Kamakshi Traders as on 31^st March 2018
Particulars	Amount Rs	Amount Rs
Balance as per cash book		15,000
Add: Cheques issued but not presented	1,500
Divided Received	200
Net payment entered twice in the Cashbook	300	2,000
		17,000
Less: Cheques deposited but not yet credited	1,000
Direct payment by bank	1,000
Locker Rent charged by the bank	1,200
Wrongly Debited in the bank	500	3,700
Balance as per bank statement		13,300