Understand the concept of bank reconciliation statemen - class-XI
Description: understand the concept of bank reconciliation statemen | |
Number of Questions: 42 | |
Created by: Ratna Goswami | |
Tags: accountancy elements of book keeping and accountancy accounting records elements of accounts commercial applications bank reconciliation statement |
The debit balance of the bank account as per the cash book should be equal to the credit balance of the account of the business in the books of the bank.
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True
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False
True.
Following is not the salient features of bank reconciliation statement:
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Any undue delay in the clearance of cheques will be shown up by the reconciliation
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Reconciliation statement will help in finding the person doing any fraud.
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Reconciliation is done by the bankers
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It helps in finding out the actual position of the bank balance.
While preparing a Bank Reconciliation Statement taking the balance as per Cash Book as the starting point, dishonour of Discounted B/R are:
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Added
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Subtracted
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Nor required to be adjusted
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None of these
Bank statement must tally with the balance of ___________.
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Sales book
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Purchase book
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Cash book
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Journal proper
The cash book serves the purpose of both the cash account and the bank account and shows he balance at the end of the period. Once the cash book is balance, the details with the records of the firm's bank transactions as recorded by the bank are checked.
Booklet or a Statement which is used to record the banking transaction is known as __________.
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Pass book
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Cash book
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Bank statement
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Petty cash book
The booklet or a statement used to record the banking transactions is known as pass book or bank statement. It is prepared by the bank. It shows all the transactions of a customer with the bank in the bank's books.
Pass book is a/an ____________of account holder's transaction with the bank.
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extract
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estimate
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balance
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model
A bank maintains records of thousands of customers in its ledgers.
State whether the following statement is True or False.
Bank Reconciliation Statement is prepared by the Bank.
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True
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False
False. Bank reconciliation statement is prepared by the business firm/ company accountant/ book keeper/ customer amd not the bank as it is the responsibility of the business to present a true and fair picture of its books of accounts to its various stakeholders.
State whether the following statement is True or False.
Bank Reconciliation Statement is prepared at the end of every month.
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True
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False
True. Bank reconciliation statement is generally prepared when the bank statement is received, which happens at the end of every month. So it is usually prepared at the end of every month by the company accountant/ book keeper.
State whether the following statement is True or False.
Bank reconciliation statement is generally prepared at the end of the year.
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True
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False
False. Bank reconciliation statement is prepared periodically. It is generally prepared when the bank statement is received by the business which happens at the end of every month. So, bank reconciliation statement is prepared at the end of every month by the business.
State whether the following statement is True or False.
Bank Reconciliation Statement is prepared to detect the errors that take place to accounting.
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True
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False
False. Bank reconciliation statement is prepared to reconcile the balances as per cash book (bank column) and pass book (bank statement) by identifying the causes of differences between the two. It, in no way detects the errors that take place in accounting while book keeping.
A Bank Reconciliation Statement is prepared by _________.
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creditors
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debtors
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business
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any of these
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.
When businessman pays money to bank it is known as _________________.
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withdrawal
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deposit
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expenses
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liability
The bank is a keeper of our money and safeguards it also paying an interest.
Which of the following type of account can be opened with bank?
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Current Account.
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Savings Account.
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Fixed Deposit Account.
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Any of the above.
Depending upon the type of requirement a customer can open any of the given accounts with the bank.
A bank is an insitution which deals in ________.
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goods
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money
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issue of currency
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none of the above
A bank is an institution which deals in money. It facilitates the transactions of different types of business both small and large scale and even on an individual level. Even though banks deal in money still they are not empowered to issues currency. In India only the Reserve Bank of India (RBI) has the power to issue currency.
When businessman takes money from bank out of its account it is known as _________.
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withdrawal
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deposit
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expenses
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liability
The bank is a keeper of our money and safeguards it also paying an interest.
________ is a statement which is prepared as on a particular date to reconcile the bank balance as per cash book with balance as per pass book by showing all the causes of difference between the two.
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A bank statement
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A bank reconciliation statement
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Income Statement
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Position statement
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.
A bank reconciliation statement is a _________.
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part of cash book
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part of financial statements
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part of pass book
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none of the above
A Bank Reconciliation Statement is an independent statement prepared to reconcile the balance between the bank column of cash book and pass book.
A bank reconciliation statement is prepared by __________.
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creditors
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debtors
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bank
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account holder
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.
A bank reconciliation statement is a statement prepared to reconcile________.
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cash balance as per cash book and bank balance as per pass book
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bank balance as per cash book and bank balance as per pass book
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both (A) & (B)
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none of the above
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.
A bank reconciliation statement is prepared by _________.
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the bank
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the bank account holder
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the government
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all of the above
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.
A bank reconciliation statement can be prepared by ___________.
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Partnership firm
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Sole proprietary concern
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Companies
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All fo the above
Bank Reconciliation is a business exercise and not a compulsion by any act or rule. This reconciliation helps in knowing where is the business money going and how much is in form of liquid cash and lying in the bank. If the balances does not tally there are possibilities of fraud or error.
A contra entry in the Cash Book means that:________.
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Debit must be in the Bank Account and the credit in the Cash Account
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Debit and credit entries are in any folio but in the Cash Book
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Debit and credit entries are on the same folio of the Cash Book
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Debit must be in the Cash Account and the credit in the Bank Account
Bank Reconciliation Statement is prepared to arrive at the Bank Balance.
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True
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False
False. Bank reconciliation statement is prepared to Reconcile the balances as per cash book (bank column) and pass book (bank statement) by identifying the causes of difference between the two for a particular period. it is prepared with the objective of reconciliation and not to arrive at the bank balance.
Bank reconciliation sometimes points to the need for adjusting entries. Invariably how should it be done?
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The reconciliation of the ending balance per the bank statement to the adjusted cash balance.
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The reconciliation of the cash balance per the company records to the adjusted cash balance.
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Both a and b
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None of the above.
Bank statement provided by the bank shows the balance as on date.Hence, bank column of cash book might not reflect all the entries as shown in bank pass book since some entries only reflect in bank pass book.Adjustments are made in business's cash book to arrive at the final balance avaialble with the business.
Some of the transaction that is dependent on bank statement are ____________.
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collection charges
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dividends received
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pre-scheduled payments
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all of the above
- Collection charges are directly charged by the bank for providing specified services and this amount is charged completely on the discretion of the bank. This amount can be recorded in the books of accounts only when we have the bank statement and not before that.
- In case of date of declaration of dividend and the date of actual receipt of it there would a difference so we need the bank statement for the actual date of receipt.
- Pre-scheduled payments are the expense bills to be paid or subscription to be paid on timely intervals. They are scheduled as per the account holders and are therefore executed by the bank automatically. To record such transactions bank statement/pass book is necessary.
If the balance as per Cash Book and Pass Book are the same, there is no need to prepare a Reconciliation Statement.
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True
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False
True. Bank reconciliation statement is prepared to reconcile the differences between the balances as per cash book and pass book. If the two balances match, then there is no need for a bank reconciliation statement.
Bank reconciliation statement is not prepared to arrive at the bank balance.
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True
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False
True. Bank reconciliation statement is prepared to reconcile the balances as per cash book (bank column) and passbook (bank statement) by identifying the causes of differences between the two for a particular period. The bank reconciliation statement is prepared with the objective of reconciling the balances and not arriving at the bank balance.
Banks objective is to ________.
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collect money on behalf of client
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give loans to client
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accept deposits of clients
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all of the above
A bank is a financial institution that deals in money by lending money and accepting deposits.
Bank reconciliation sometimes points to the need for adjusting entries. Invariably how should it be done?
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The reconciliation of the ending balance per the bank statement to the adjusted cash balance.
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The reconciliation of the cash balance per the company records to the adjusted cash balance.
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Both a and b
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None of the above
Bank statement provides balance as on date. But to determine the exact balance available with the business, it is required for business to prepare bank reconciliation statement while making adjustments in the bank column of cash book.
The purpose of preparing a Bank Reconciliation Statement is to ___________.
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ascertain the difference between the pass book balance and the bank statement balance
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correct errors in the cash book or errors in the bank statement
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amend the balance of the bank statement of the firm
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amend the balance of the cash book of the firm
A bank reconciliation statement is a vital statement for the business.
In case of an enterprise having an overdraft facility the bank reconciliation statement treats all the cheques deposited but not cleared in the cash book to be __________.
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added
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deducted
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to be revealed only in pass book
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to be revealed only in cash book
Overdraft facility means that the customer is allowed to withdraw money from his bank account even when the balance is zero. However, this does not affect the way in which the cheques deposited but not cleared are recorded in the cash book. Cheques deposited but not cleared are debited in the cash book (bank column). Thus, even in the case of an enterprise having overdraft facility, the bank reconciliation statement treats all the cheques deposited but not cleared as added.
Base of reconciliation statement is_______________.
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balance shown in cash book
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balance shown in pass book
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either a or b
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nor a nor b
Base of a reconciliation statement can either be as per cash book or bank pass book since balances of both the books are considered to know the final balance available with the business.
Bank reconciliation statement points out _______________.
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credibility of the balance shown in pass book
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saving account
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fixed deposit account
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recurring deposit account
A bank reconciliation statement is prepared using cash book which is prepared by the business and passbook which is prepared by the bank. When the balances of these two books are compared and reconciled, the credibility of the balances is established. Since the business prepares the cash book and the bank reconciliation statement and the passbook is prepared by the bank, the business is able to establish the credibility of the balance as per pass book which is not prepared by the business, on the basis of cash book while preparing bank reconciliation statement, which are prepared by it.
A bank reconciliation statement is a statement prepared to reconcile.
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Cash balance as per cash book and bank balance as per pass book
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Bank balance as per cash book and bank balance as per pass book
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Both (A) & (B)
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None of the above
A bank reconciliation statement is a statement prepared by the business to reconcile the differences in balance as per bank column in the cash book and bank balances as per pass book (bank statement). The passbook is a copy of the customer's account with the bank and it is prepared by the bank. On the other hand, cash book is prepared by the business and bank column of cash book shows all those transactions of the business which are carried out through the bank account. So it is often, that there are differences between these two balances as they are prepared by different entities with different viewpoints which is why bank reconciliation statement is required to Reconcile these differences.
How would deposits in transit be handled when reconciling the ending cash balance as per the bank statement to the correct adjusted cash balance?
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Added to the balance as per the bank statement.
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Subtracted from the balance as per the bank statement.
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Added to the balance as per company records.
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Ignored.
In case of deposits in transit the entry for would have been entered in the cash book due to which the cash book balance would be higher than the pass book balance.
________ is a statement which is prepared as on a particular date to reconcile the bank balance as per cash book with balance as per pass book by showing all causes of difference between the two.
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A bank statement
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A bank reconciliation statement
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Income statement
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Position statement
A bank reconciliation statement is prepared by.
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Creditors
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Debtors
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Bank
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Businessman
A bank reconciliation statement is prepared to show reconciliation of balances as per cash book and passbook by identifying the causes of differences between the two. It is prepared by the book keeper/ company accountant/ businessman/ customer as it is the responsibility of the business to present a true and fair picture of its books of accounts to its various stakeholders.
Which of the following is not the salient feature 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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Reconciliation is done by the account holder.
A bank reconciliation statement is a statement prepared by the account holder to reconcile the differences arising between the bank balances as per pass book and the cash book.
A bank reconciliation statement is prepared by.
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The bank
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The bank account holder
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The government
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The user of financial statements
A bank reconciliation statement is prepared by the one who holds an account in the bank. A bank will never prepare a bank reconciliation statement but only provides with the summary of transactions undertaken by the account holder during a given period in form of a bank pass book.
A bank reconciliation statement can be prepared by.
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Partnership firm
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Sole propriety concern
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Companies
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All of the above
Bank reconciliation statement is prepared by p'ship firms, sole traders and companies i.e ones which have businesses.
A bank reconciliation statement is prepared to find out the causes of the difference between:
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The balance as shown by the cash column of the cash book with the balance shown by its bank column.
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The balance as shown by the cash column of the cash book with the balance shown by the pass book.
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The balance shown by the bank column of the cash book with the balance shown by the pass book.
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None of the above
Which of the following are the salient features of bank reconciliation statement?
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Any undue delay in the clearance of cheque will be shown up by the reconciliation
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Reconciliation statement will help in finding the person doing'any fraud
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It helps in finding out the actual position of the bank balance
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(a), (b) and (c)
Bank reconciliation statement is prepared to reconcile the balances as per cash book (bank balance) and pass book (bank statement) by identifying the causes of differences between the two. So, in other words, any undue delay in the clearance of the cheque will be shown. If any fraud is happening, it will show up when the balances would not match. And, it will also help us arrive at the actual position of the bank balance.