When drawing up a Bank Reconciliation Statement, if you start with a debit balance as per the Bank Statement, the unpresented cheques should be:
  • a)
    Added;    
  • b)
    Deducted;    
  • c)
    Not required to be adjusted.  
  • d)
    None of the above.
Correct answer is option 'A'. Can you explain this answer?

CA Foundation Question

4 Answers
Aditya Kabra answered 3 weeks ago
We are starting from balance as per pass book, which means cheques issued but not presented affect only on cash book. So it should be deducted.
Option B IS THE CORRECT ANSWER.

#fzd Boys answered Apr 13, 2019
But we are preparing as per the bank statement means as per pass book so cheque issued but not presented for payment is deducted so the answer 2 is correct

Nitin Mishra answered Sep 01, 2018
These represent cheques that have been issued by an entity to a customer or another third party but which have not presented to the bank by the reconciliation date. Entity records the payment in its cash book as soon as the cheque is issued to the person but the bank records the transaction when it receives the cheque. This causes a timing difference in the recording of the payment.

As the bank would not have recorded the unpresented cheques, the balance appearing in bank statement would be higher than the cash book balance which is why the amount of outstanding cheques is added to the cash book balance in the bank reconciliation.

Deepak Mishra answered Oct 01, 2018
The unpresented cheques should be subtracted..bcoz when we are preparing brs by pass book Bal.. unpresented cheques are deducted from cash book ..but they are not encashed.. therefore they need to be subtracted

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