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Question
Give any three reasons for preparing bank reconciliation statement.
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Solution
The main reasons for preparing a bank reconciliation statement are:
- To identify the reasons for the difference between the bank balance as per the cash book and bank balance as per bank statement.
- To identify the delay in the clearance of cheques.
- To ascertain the correct balance of the bank column of the cash book.
- To discourage the accountants of the business as well as the bank from misusing funds.
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RELATED QUESTIONS
Answer in one sentence:
Who prepares a bank Pass Book?
Answer in one sentence:
Who prepares the Bank Reconciliation Statement?
Answer in one sentence:
Why is the Bank Reconciliation Statement prepared?
Give one word/term/phrase which can substitute the following statement:
Statement showing the causes of disagreement between balance of Cash Book and Pass Book.
Give one word/term/phrase which can substitute the following statement:
Excess of bank deposits over withdrawals by businessman in bank current account.
Do you agree or disagree with the following statement:
Bank Reconciliation Statement is prepared only during the year end.
Select the most appropriate alternative from those given and rewrite the following statement:
Bank Reconciliation Statement is prepared by _________.
A bank reconciliation statement is prepared to know the causes for the difference between:
Correct and rewrite the following statement:
Bank Reconciliation Statement is prepared by Bank.
On 31st August 2018 bank passbook of Mr. Ravi showed a credit balance of ₹ 33,600, but Cash Book showed a different balance. On comparing the two books following differences were noticed:
- Cheques paid into the bank but not credited before 31st Aug 2018 amounted to ₹ 24,500.
- Direct deposit by the customer through NEFT ₹ 33,000 recorded in the passbook only.
- Cheques issued on 28th Aug 2018 were presented for payment on 5th Sep. 2018 amounted to ₹ 38,800.
- A bill receivable for ₹ 15,000 discounted with the bank was dishonored on 30th Aug 2018. Intimation of the same was received only on 3rd Sep 2018.
- Passbook credit side was overcast ₹ 2,000.
- Bank debited ₹ 400 for bank charges in the passbook, which was not recorded in Cash Book.
Prepare Bank Reconciliation Statement as of 31st August 2018.
