Tag: understand the concept of bank reconciliation statemen

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Multiple choice elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

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. 

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

True. 

The debit balance of the cash book (bank column) should be equal to the credit balance in the account of the business in the books of the bank (pass book/ bank statement). This is because, pass book (bank statement) is a copy of the customer's account in the books of bank from the point of view of the bank. So our debit balance is shown as credit balance by them.

Multiple choice elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

Following is not the salient features of bank reconciliation statement: 

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

  2. Reconciliation statement will help in finding the person doing any fraud.

  3. Reconciliation is done by the bankers

  4. It helps in finding out the actual position of the bank balance.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A bank reconciliation statement is prepared by the account holder (the business), not the bank, to reconcile their own records with the bank statement.

Multiple choice elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

While preparing a Bank Reconciliation Statement taking the balance as per Cash Book as the starting point, dishonour of Discounted B/R are:

  1. Added

  2. Subtracted

  3. Nor required to be adjusted

  4. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When a discounted bill of exchange is dishonored, the bank deducts the amount from the account. If starting with the Cash Book balance, this amount must be subtracted to match the bank's records.

Multiple choice elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

 Bank statement must tally with the balance of ___________.

  1. Sales book

  2. Purchase book

  3. Cash book

  4. Journal proper
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

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. 

A bank statement or a bank passbook is a copy of a bank account as shown by the bank records. It enables the bank customers to check their funds in the bank regularly and update their own records of transactions that have occurred. The amount of balance shown in the passbook or the bank statement must tally with the balance as shown in the cash book.

Multiple choice elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

Booklet or a Statement which is used to record the banking transaction is known as __________.

  1. Pass book

  2. Cash book

  3. Bank statement

  4. Petty cash book
Reveal answer Fill a bubble to check yourself
A,C Correct answer
Explanation

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.

Multiple choice elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

Pass book is a/an ____________of account holder's transaction with the bank.

  1. extract

  2. estimate

  3. balance

  4. model
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A bank maintains records of thousands of customers in its ledgers.

However, a pass book is an extract of all the transactions undertaken by a particular account holder through the bank account maintained by the account holder with the bank. These are the confidential details of a particular account which are provided only to the respective account holder.

Multiple choice elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

State whether the following statement is True or False.
Bank Reconciliation Statement is prepared by the Bank.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

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.

Multiple choice elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

State whether the following statement is True or False.
Bank Reconciliation Statement is prepared at the end of every month.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

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.

Multiple choice elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

State whether the following statement is True or False.
Bank reconciliation statement is generally prepared at the end of the year.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

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.

Multiple choice elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

State whether the following statement is True or False.
Bank Reconciliation Statement is prepared to detect the errors that take place to accounting.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

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.