Tag: journal entries for transactions through bank and for loans

Questions Related to journal entries for transactions through bank and for loans

The basic aim of Lead Bank Scheme is that ____________________.

  1. big banks should try to open offices in each district

  2. there should be stiff competition among the various nationalized banks

  3. individual banks should adopt particular districts for intensive development

  4. all the banks should make intensive efforts to mobilize deposits.


Correct Option: C
Explanation:

The basic aim of Lead Bank Scheme is that there should be stiff competition among the various nationalized banks and big banks should try to open offices in each district.

A bank issued an advice to the account holder whenever it deducts a certain amount from his account.

  1. True

  2. False


Correct Option: A
Explanation:

True. A bank's advice is like a notice that the bank gives to the customer when any transaction takes place. Hence, bank always issues an advice while money gets deducted from customers account and also when money is deposited in the customer account.

The total of discount column on the debit side of the cash book is posted to the _________________.

  1. Credit of the discount allowed account

  2. Debit of the discount received account

  3. Credit of the discount received account

  4. Debit of the discount allowed account.


Correct Option: D

For opening Joint Bank account, in case of separate sets of books:

  1. Venture A/c will be debited and Ventures A/c will be credited

  2. Joint Bank A/c is debited and Ventures Capital A/c is credited

  3. Joint Venture A/c is debited and Joint Bank A/c will be credited

  4. Joint Bank A/c will be debited and Joint Venture A/c will be credited


Correct Option: B
Explanation:

For opening a Joint bank account, in case of separate sets of books are joint bank account debited and ventures capital account is credited. A joint bank account is like any other bank account. 

When does a entry termed as a combined entry ___________.

  1. if two transactions of one company are involved

  2. if there is debit and credit both

  3. transactions are of the same nature and they take place on the same day.

  4. all the accounts are debited the very same day


Correct Option: C

A bank statement is a copy of ___________.

  1. a creditors account in the bank book

  2. bank column of the cash book

  3. cash column of the cash book

  4. none of the above


Correct Option: B
Explanation:

A Bank statement is a copy of bank column of the cash book. The businesses maintain cashbook with two column which has one cash column and other bank column. The bank column records all the transactions that take place in the bank account.  

A bank pass book is a copy of :

  1. The cash column of a customer's cash book.

  2. The bank column of a customer's cash book

  3. The customer's account in the bank's ledger.

  4. None of these


Correct Option: C
Explanation:

A Pass Book is a copy of customer's account issued by the bank. The bank maintains the customer accounts in its books of accounts which are further shown in the pass book. Thus passbook is a record of all the transactions that take place in a customers account.

The difference in the balances of both the cash-book and the pass-book can be because of :

  1. Timing difference of recording of the transaction.

  2. Errors in cash book committed by account holder.

  3. Error in pass book committed by Bank

  4. All of the above.


Correct Option: D
Explanation:

The difference between the balances of cash book and pass book is because of the timing difference, errors in cash book committed by account holder, error is book committed by bank. Some of the reasons can be cheques issues and not presented in the bank, interest allowed by the bank, direct payment through bank, cheques dishonoured, etc. 

Debit balance as per Cash Book of ABC Enterprises as on 31st March is Rs. 3,000. Cheques deposited but not cleared amounts to Rs. 200 and Cheques issued but not presented of Rs. 300. The bank allowed interest amounting Rs. 100 and collected dividend Rs. 100 on behalf of ABC Enterprises. Balance as per pass book should be __________ .

  1. Rs. 3,200

  2. Rs. 2,900

  3. Rs. 3,700

  4. Rs. 3,300


Correct Option: D
Explanation:

Bank reconciliation statement of ABC Ltd.
Balance as per cash book                                             =    3000 
Add:- Cheques issued but not presented                    =      300
         Dividend collected on behalf of ABC LTD          =       100
          Interest allowed by bank                                    =        100

Less:- Cheques deposited but not cleared                  =     (200)
          
Balance as per Passbook                                              =     3300

A bank reconciliation statements is prepared to reconcile the difference in -

  1. Cash balance and bank balance

  2. Cash balance and pass book balance.

  3. Bank balance as per bank column of cash book and pass book.

  4. None of above.


Correct Option: C