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A Bank Reconciliation Statement is : 
  • a)
    A part of Pass Book 
  • b)
    A statement prepared by bank 
  • c)
    Cash book relating to cash column 
  • d)
    A statement prepared by customer 
Correct answer is option 'D'. Can you explain this answer?
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A Bank Reconciliation Statement is :a)A part of Pass Bookb)A statement...
A bank reconciliation statement is a process that explains the difference on a specified date between the bank balance shown in an organization's bank statement, as supplied by the bank and the corresponding amount shown in the organization's own accounting records.
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A Bank Reconciliation Statement is :a)A part of Pass Bookb)A statement...
Bank Reconciliation Statement


A Bank Reconciliation Statement is a statement prepared by the customer to reconcile the difference between the bank balance as per the cash book and the bank balance as per the bank statement. It is an important financial document that helps in identifying and resolving discrepancies between the two balances.


Explanation


Let's understand the components and purpose of a Bank Reconciliation Statement:


1. Bank Balance as per Cash Book


The cash book is a book of original entry where all cash and bank transactions are recorded. The bank balance as per the cash book is the total amount of money available in the bank account based on the transactions recorded in the cash book.


2. Bank Balance as per Bank Statement


The bank statement is a document issued by the bank that provides details of all transactions made in the bank account during a particular period. It includes deposits, withdrawals, bank charges, interest, etc. The bank balance as per the bank statement is the total amount of money available in the bank account according to the bank's records.


3. Purpose of Bank Reconciliation Statement


The main purpose of preparing a Bank Reconciliation Statement is to identify and resolve any discrepancies between the bank balance as per the cash book and the bank balance as per the bank statement. These discrepancies can arise due to various reasons such as:



  • Outstanding checks: Checks issued by the customer but not yet presented for payment.

  • Outstanding deposits: Deposits made by the customer but not yet credited by the bank.

  • Bank charges: Charges levied by the bank for services provided.

  • Interest earned: Interest earned on the bank account.

  • Errors: Errors made by either the customer or the bank in recording transactions.



4. Preparation of Bank Reconciliation Statement


To prepare a Bank Reconciliation Statement, the customer compares the transactions recorded in the cash book with the transactions listed in the bank statement. Any differences between the two balances are identified and adjusted to arrive at the correct bank balance. The adjustments may include adding outstanding deposits, deducting outstanding checks, adding or deducting bank charges or interest, and correcting any errors.


Once the adjustments are made, the adjusted bank balance as per the cash book should match the bank balance as per the bank statement. The Bank Reconciliation Statement serves as a proof of the accuracy of the bank balance and helps in ensuring that the financial records of the customer are in line with the bank's records.


Therefore, option D is the correct answer as a Bank Reconciliation Statement is prepared by the customer to reconcile the difference between the bank balance as per the cash book and the bank balance as per the bank statement.
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A Bank Reconciliation Statement is :a)A part of Pass Bookb)A statement prepared by bankc)Cash book relating to cash columnd)A statement prepared by customerCorrect answer is option 'D'. Can you explain this answer?
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A Bank Reconciliation Statement is :a)A part of Pass Bookb)A statement prepared by bankc)Cash book relating to cash columnd)A statement prepared by customerCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A Bank Reconciliation Statement is :a)A part of Pass Bookb)A statement prepared by bankc)Cash book relating to cash columnd)A statement prepared by customerCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A Bank Reconciliation Statement is :a)A part of Pass Bookb)A statement prepared by bankc)Cash book relating to cash columnd)A statement prepared by customerCorrect answer is option 'D'. Can you explain this answer?.
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