Very Short Answer Type Questions - Bank Reconciliation Statement Commerce Notes | EduRev

Crash Course of Accountancy - Class 11

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Commerce : Very Short Answer Type Questions - Bank Reconciliation Statement Commerce Notes | EduRev

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Q1. Briefly describe what is Bank Reconciliation Statement?

Ans. Bank Reconciliation Statement is a statement prepared to reconcile the bank balance as per Cash Book with the balance as per Bank Statement or Bank Pass Book. The reasons for differences are ascertained and presented in the statement.


Q2. Why is Bank Reconciliation Statement prepared?

Ans. Bank Reconciliation Statement is prepared to determine the reasons for differences between balance as per Cash Book and balance as per Bank Statement or Bank Pass Book and if necessary to record the entry.


Q3. State any two reasons of difference between Cash Book and Bank Pass Book balances.

Ans.

(i) Cheques deposited but not credited.

(ii) Cheques issued but not presented for payment.


Q4. What does ‘Debit’ balance as per the Cash Book mean?

Ans. Debit balance as per Cash Book means amount lying deposited in bank.


Q5. What does ‘Credit’ balance as per the Cash Book mean?

Ans. Credit balance as per Cash Book means amount overdrawn from the bank.


Q6. What does ‘Debit’ balance as per the Bank Pass Book mean?

Ans. Debit balance as per Pass Book means amount overdrawn from bank and thus, payable to bank. 


Q7. What does ‘Credit’ balance as per the Bank Pass Book mean?

Ans. Credit balance as per Pass Book means amount lying deposited in the bank.


Q8. When you proceed to reconcile the Bank Account starting with ‘Debit’ Cash Book balance, how is the following dealt with and why?

(i) Cheques issued but not presented for payment.

(ii) Cheques deposited but not yet credited.

(iii) Bank charges charged by the bank not recorded in the Cash Book.

(iv) Interest allowed by the bank not recorded in the Cash Book.

Ans.

(i) Cheques issued but not yet presented for payment are added because the bank will show higher balance since the cheques have not been paid.

(ii) Cheques deposited but not credited are deducted because the bank will show lower balance as the cheques have not been realised by the bank.

(iii) Bank charges are deducted because the bank has already debited the account and thus, Cash Book shows higher balance.

(iv) Interest allowed is added because the bank has already credited the account and thus, Cash Book shows lower balance.


Q9. When you proceed to reconcile the Bank Account starting with ‘Credit’ Cash Book balance, how will you deal with the transactions given in Q. 8?

Ans.

(i) Cheques issued but not yet presented for payment are deducted because bank shows lower overdrawn balance.

(ii) Cheques deposited but not cleared are added because bank shows higher overdrawn balance.

(iii) Bank charges are added because bank shows higher overdrawn balance.

(iv) Interest allowed is deducted because bank shows lower overdrawn balance.


Q10. Is Bank Reconciliation Statement a part of Double Entry System?

Ans. No, Bank Reconciliation Statement is not a part of Double Entry System. It is a method to reconcile the two balances.


Q11. Is it correct that Bank Reconciliation Statement is prepared once, i.e., at the end of the year?

Ans. No, it is not correct. It can be prepared at any time of the year say every month or every quarter or half yearly or yearly.


Q12. How will direct payment by a customer affect the Pass Book balance?

Ans. A direct payment by a customer will

(i) increase the credit balance as per Pass Book; or

(ii) reduce the debit balance as per Pass Book.


Q13. Give one point of importance of bank reconciliation statement.

Ans. A bank reconciliation statement locates the errors or omissions that may have been committed either on the part of the customer or the bank. The errors so detected can be rectified accordingly.


Q14. What is meant by debit balance in Pass Book?

Ans. Debit balance in Pass Book means overdraft.


Q15. Which balances are called ‘Overdraft’ of Cash Book and Pass Book?

Ans. Cash Book Cr. Balance and Pass Book Dr. Balance.


Q16. Name two items which are written in plus column while starting with Debit balance of Cash Book.

Ans.

(i) Cheques issued or drawn but not yet presented for payment.

(ii) Interest allowed by bank not recorded in Cash Book.


Q17. Name two items which are written in minus column while starting with Debit balance of  Cash Book.

Ans.

(i) Cheques paid into bank for collected but not yet credited by bank.

(ii) Direct payment made by the bank according to the standing instructions of customers.


Q18. Name two items which are written in plus column while starting with Overdraft balance of  Cash Book.

Ans.

(i) Cheques issued or drawn but not yet present for payment.

(ii) Interest allowed by bank not recorded in Cash Book.


Q19. Name two items which are written in Minus column while starting with Overdraft balance of Cash Book.

Ans.

(i) Cheques paid into bank for collection but not yet credited by bank.

(ii) Direct payment made by the bank according to the standing instructions of customers.


Q20. Name two items which are written in plus column while starting with Overdraft balance of Pass Book.

Ans.

(i) Cheques paid into bank for collection but not yet credited by bank.

(ii) Bank Charges and commission charged by bank.


Q21. Name two items which are written in Minus column while starting with Overdraft balance of Pass Book.

Ans.

(i) Cheques issued or drawn but not yet presented for payment.

(ii) Amount directly deposited by the customers in our bank account.


Q22. Name two items which are written in Plus Column while starting with Credit balance of Pass Book.

Ans.

(i) Cheques paid into bank for collection but not yet cleared by bank.

(ii) Bank charges and commission charged by bank.


Q23. Name two items which are written in Minus Column while starting with Credit balance of Pass Book.

Ans.

(i) Cheques issued or drawn but not yet presented for payment.

(ii) Amount directly deposited by customers in our bank account. 


Q23. Mention two items which are not recorded in an amended Cash Book.

Ans.

(i) Cheques deposited into bank but not yet credited by bank.

(ii) Cheques issued but not yet presented for payment in the bank.

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