Page 183 - DCOM101_FINANCIAL_ACCOUNTING_I

Unit 13: Bank Reconciliation Statement

13.6 Self Assessment Notes

Fill in the blanks:

1. The main objective of reconciliation is to ascertain if the discrepancy is due to error rather
than ……………… .
2. Direct payments made by banks will ………………… the balances in the pass book.

3. The bank reconciliation statement is prepared without making change in the ……………..
balance.
4. While reconciling the pass book through the check book the interest allowed by banks will
be …………….. .
5. While reconciling the check book through pass book the interest and expenses will be
…………….. from the balance as per pass book.

6. Overdraft means ................. balance.
7. The balance of cash book is ................. in case of overdraft
8. Bank charges will ................. in case of overdraft as per Cash Book.
9. Cheques issued but not encashed will ................. in case of the overdraft as per Pass Book.
10. Interest allowed by bank ................. in case of the favourable balance of cash book.

State whether the following statements are true or false:
11. Bank reconciliation statement may also show any undue delay in the clearance of
cheques.
12. The balance of cash book will decrease when cheques paid into the bank account but not
yet cleared.
13. Dishonour of bill discounted with the bank will decrease the balance in the pass book.
14. The main objective of reconciliation is to ascertain if the discrepancy is due to timing rather
than error.
15. ECS means Electronic Clearance System.

13.7 Review Questions

1. What is a Bank Reconciliation statement?

2. Enumerate the causes of difference in the balance of cash book and pass book
3. From the following particulars, prepare Bank Reconciliation statement as on December 31,
2006.
(a) Balance as per Cash Book `4,200

(b) Cheques issued but not presented for payment `2,000
(c) Cheques deposited but not collected `3,000
(d) Bank charges debited by the bank `250
4 Prepare Bank Reconciliation statement as on March 31, 2006. On this date the passbook of
M/s Noopur Industries showed a balance of `27,500.
(a) Cheques of `14,000 directly deposited by a customer.

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