What is the primary purpose of a bank statement?

To show the balance of the account at a particular date.

To provide a list of transactions made by the account holder.

To inform the account holder about interest earned.

To notify the account holder of pending transactions.

Why is it important to reconcile a bank statement with the cash book?

To ensure all deposits are reflected accurately.

To verify the accuracy of the bank's record.

To calculate interest earned on deposits.

To identify errors in the cash book.

What is the purpose of a bank reconciliation statement?

To list all transactions in chronological order.

To reconcile the bank balance with the cash book balance.

To calculate the total interest accrued.

During reconciliation, a deposit of $500 was recorded in the cash book but not in the bank statement. How should this be adjusted?

Deduct $500 from the bank statement balance.

Add $500 to the bank statement balance.

Deduct $500 from the cash book balance.

Add $500 to the cash book balance.

Which of the following errors would cause the cash book balance to exceed the bank statement balance?

A bank charge not recorded in the cash book.

A deposit in transit not yet recorded by the bank.

An interest payment not recorded in the cash book.

A check issued but not yet presented for payment.

Why might a bank statement show a lower balance than the cash book balance?

Bank charges deducted by the bank.

Errors in recording transactions in the cash book.

Checks issued but not yet presented for payment.

Which of the following adjustments is necessary during bank reconciliation if an outstanding check is discovered?

Deduct the amount of the outstanding check from the bank statement balance.

Add the amount of the outstanding check to the cash book balance.

Add the amount of the outstanding check to the bank statement balance.

Deduct the amount of the outstanding check from the cash book balance.

What does a positive balance in the bank reconciliation statement indicate?

The cash book balance is higher than the bank statement balance.

The bank statement balance is higher than the cash book balance.

There is an error in the reconciliation.

If a direct debit was not recorded in the cash book, how should this error be adjusted during reconciliation?

Add the direct debit amount to the cash book balance.

Deduct the direct debit amount from the cash book balance.

Add the direct debit amount to the bank statement balance.

Deduct the direct debit amount from the bank statement balance.

Why should bank reconciliation be performed regularly?

To calculate interest earned on deposits.

To identify errors or discrepancies.

To determine the total transactions made.

Bank Reconciliation Free MCQ Practice Test with Solutions

	Accounting for GCSE/IGCSE 22 videos\|29 docs\|12 tests

	Accounting for GCSE/IGCSE 22 videos\|29 docs\|12 tests

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