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?

Question

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?

Answer

Bank Reconciliation Statement and Debit Balance

Bank Reconciliation Statement is a statement that reconciles the bank balance as per the company's books with the bank balance as per the bank statement. The statement helps in identifying the discrepancies and errors between the two balances.

Debit Balance occurs when the bank balance as per the bank statement is more than the bank balance as per the company's books. In this case, the company owes money to the bank.

Unpresented Cheques

Unpresented Cheques are the cheques issued by the company but not yet presented to the bank for payment. These cheques are included in the company's books, but not in the bank statement, resulting in a difference between the two balances.

Adjustment of Unpresented Cheques

When drawing up a Bank Reconciliation Statement with a debit balance as per the Bank Statement, the unpresented cheques should be added to the bank balance as per the company's books. This adjustment will increase the bank balance, bringing it closer to the bank balance as per the bank statement.

Reason for Adding Unpresented Cheques

Unpresented Cheques represent the company's liabilities, and hence, should be added to the bank balance as per the company's books. The company owes money to the bank for these cheques, and hence, the bank balance should be increased accordingly.

Conclusion

In conclusion, when drawing up a Bank Reconciliation Statement with a debit balance as per the Bank Statement, the unpresented cheques should be added to the bank balance as per the company's books. This adjustment will bring the bank balance closer to the bank balance as per the bank statement, helping the company identify any discrepancies and errors.

Answer

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.

Answer

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

Answer

I have seen a similar question and the explanation was
'Whenever there is an overdraft balance of Pass book at starting point, then '
We add :
Only those cases in which Cash book balance is lower than bank statement.
In this case Unpresented cheques means I have issued but not presented in bank yet. It shows cash book balance has lowered down but bank balance is higher.
so We will add this..

There is another question similar to it is:
Q1 Starting with an overdraft balance as per passbook then ' cheques deposited but not yet cleared ' are:
Ans. Deducted

Same explanation as above . In this transaction Balance of cash book increases and balance of Pass book decreases , so we won't add it . Rather , we will Deduct.

Answer

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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