Bank Reconciliation Statement

Topics in this chapter

• BRS Purpose And Basics
• Cash Book And Pass Book Balances
• Timing Differences In BRS
• Bank Direct Entries And Dishonours
• BRS Errors And Rectification
• Preparing Bank Reconciliation Statements

Cheat sheet

Practice questions

1. Question 1Q-A65811

   What is a Bank Reconciliation Statement primarily prepared for?

   1. A.To ascertain the actual profit of the business
   2. B.To reconcile the differences between the cash book bank balance and the pass book balance
   3. C.To rectify errors made in the journal and ledger
   4. D.To calculate the total cash sales made during a period
   See the answer and solution
2. Question 2Q-F3CF36

   Which of the following causes a difference between the cash book and pass book balances due to timing?

   1. A.Cheques issued by the firm but not yet presented for payment
   2. B.A direct payment made by a customer into the bank account not recorded in the cash book
   3. C.An error by the bank in debiting the account twice for the same charge
   4. D.Dishonour of a discounted bill of exchange recorded wrongly
   See the answer and solution
3. Question 3Q-6A70CD

   If the balance as per the cash book (debit balance) is Rs. 10,000, and cheques amounting to Rs. 2,000 were deposited into the bank but not yet collected, what will be the balance as per the pass book?

   1. A.Rs. 12,000
   2. B.Rs. 10,000
   3. C.Rs. 8,000
   4. D.Rs. 6,000
   See the answer and solution
4. Question 4Q-97C9B1

   A favourable balance given in the cash book means which of the following?

   1. A.Debit balance in the cash book indicating bank overdraft
   2. B.Credit balance in the cash book indicating bank overdraft
   3. C.Debit balance in the cash book indicating bank deposit/cash at bank
   4. D.Credit balance in the cash book indicating cash in hand
   See the answer and solution
5. Question 5Q-938B2A

   When preparing a Bank Reconciliation Statement starting with an overdraft balance as per the cash book, how are cheques issued but not yet presented treated?

   1. A.Added
   2. B.Deducted
   3. C.Ignored
   4. D.Added twice
   See the answer and solution