BANK RECONCILATION STATEMENT

1. Bank reconciliation statement is

__________
a) A ledger account
b) A part of cash book with bank column

c) A statement showing the causes of

difference between the cash book and pass book balances

d) All of the above

 Answer: A statement showing the causes of difference between the cash book and pass book balances

 2. Bank reconciliation statement may be

prepared with the balance of ________

a) Cash book
b) Pass book

c) Entire cash book or pass book

d) Neither cash book nor pass book

 Answer: Entire cash book or pass book

 3. Debit balance of pass book shows

__________
a) Deposit (plus) balance
b) Overdraft (minus) balance

c) Either deposit or overdraft balance

d) Neither deposit nor overdraft balance

 Answer: Overdraft (minus) balance

 4. Pass book is a ________ a) Copy of receipts and payment of the firm b) Copy of the firms ledger account

maintained by the bank

c) Copy of the bank transactions entered in

the cash book

d) Record of all transactions

 Answer: Copy of the firms ledger account maintained by the bank

 5. Overdraft facility is available only in

_________
a) Savings bank account
b) Current account

c) Recurring deposit account

d) Fixed deposit account

 Answer: Current account

 6. The bank balance is treated as plus

(deposit) balance, if it is a _________

a) Debit balance of cash book
b) Credit balance of pass book

c) Both a & b
d) Credit balance of cash book

 Answer: Both a & b

 7. Bank column in cash book shows a credit

balance. What does it mean?

a) There must be un-deposited cash
b) There is overdraft balance

c) There must be some error in recording

d) Cashier has embezzled cash

 Answer: There is overdraft balance

 8. A Bank reconciliation statement is

prepared to know the causes for difference between ____

a) The balance as per cash column of cash

book & pass book

b) The balance as per bank column of cash

book & pass book

c) Both a & b
d) Neither a or b

 Answer: The balance as per bank column of cash book & pass book

 9. A Bank reconciliation statement is

prepared by _________
a) Bank
b) Customer of the bank

c) Creditors
d) Government

 Answer: Customer of the bank

 10. A Bank reconciliation statement is

prepared with the help of __________

a) Bank pass book and bank column of cash

book
b) Bank pass book and cash column of cash

book
c) Bank pass book and petty cash book d) All the above

 Answer: Bank pass book and bank column of cash book

 11. If you start with cash book deposit

balance in the Bank reconciliation statement, which item or items will you add?
a) Cheques issued but not yet presented for

payment
b) Amounts directly deposited by the

customer into bank

c) Interest allowed by the bank
d) All the above

 Answer: All the above

 12. If you start with cash book deposit

balance in the Bank reconciliation statement, which item or items will you deduct?
a) Dishonored cheque

b) Discounted bills dishonored

c) Dividend on shares collected by bank

d) Both a & b

 Answer: Both a & b

 13. The main purpose of preparing a Bank

reconciliation statement is ________

a) To know cash book balance
b) To know pass book balance

c) To compare the transactions in the cash

book and pass book

d) To reconcile balance as per cash book with

the pass book

 Answer: To reconcile balance as per cash book with the pass book

 14. Bank reconciliation statement is a

_________
a) Separate statement
b) Ledger account

c) Sub division of journal

d) Part of cash book

 Answer: Separate statement

 15. Unfavorable bank balance means

_________
a) Debit balance in cash book
b) Debit balance in pass book

c) Credit balance in cash book

d) Both b & c

 Answer: Both b & c

 16. A cheque received and deposited in the

bank on the same day is recorded in the _________

a) Bank column of cash book

b) Cash column of cash book

c) Both a & b

d) Discount column of cash book

 Answer: Bank column of cash book

 17. An amount of Rs. 5000 is debited twice

in the pass book. When overdraft balance as per the cash book is the starting point _______
a) Rs. 5000 will be added b) Rs. 5000 will be deducted c) Rs. 10000 will be added d) Rs. 10000 will be deducted

 Answer: Rs. 5000 will be added

 18. Which one of the following statements is false? a) Pass book is a copy of customers account in the

ledger of the bank

b) Normally, if the pass book shows credit balance, the

cash book shows debit balance

c) Unfavorable bank balance means debit balance in

pass book and credit balance in cash book

d) Unfavorable bank balance means credit balance in

pass book and debit balance in cash book

 Answer: Unfavorable bank balance means credit balance in pass book and debit balance in cash book

 19. Which one of the following statements

is false?
a) Debit balance in pass book means overdraft
b) Bank passbook is a copy of customers

account in the books of bank

c) For a dishonored cheque, bank account is

debited
d) Debit entry in pass book means a credit

entry in cash book

 Answer: For a dishonored cheque, bank account is debited