Direct Payments Made by Bank
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The following were the balances extracted from the books of Yogita as on 31st March, 2016.
ParticularsDebit (Rs.)ParticularsCredit (Rs.)Cash in Hand 540Sales98, 780Cash at Bank 2, 630Return Outwards 500Purchases40, 675Capital Account62, 000Return Inwards 680Sundry Creditors 6, 300Wages 8, 480Rent 9, 000Fuel and Power 4, 730Carriage on Sales 3, 200Carriage on Purchases 2, 040Opening Stock 5, 760Building32, 000Freehold Land10, 000Machinery20, 000Salaries15, 000Patents 7, 500General Expenses 3, 000Insurance 600Drawings 5, 245Sundry Debtors14, 500
Taking into account the following adjustments, prepare the trading and profit and loss account and balance sheet as at 31st March, 2016.
(i) Stock in hand on 31st March, 2016 was Rs. 6, 800.
(ii) Machinery is to be depreciated @ 10% and patents @ 20%.
(iii) Salaries for the month of March, 2013 amounting to Rs. 1, 500 were outstanding.
(iv) Insurance includes an annual premium of Rs. 170 on a policy expiring on 30th September, 2016.
(v) Further bad debts are Rs. 725. Create a provision of 5% on debtors.
(vi) Rent receivable Rs. 1, 000.
What is a bank overdraft?
What are basic arithmetic skills?
What is the full form of CPA?
Explain the process of preparing a bank reconciliation statement with amended cash balance.
The insurance premium paid is recorded as Rs 4, 500 in cash book, however the same is shown as Rs 9, 000 in passbook. What shall be the effect in BRS if starting point is cash book balance?
Rs 9, 000 shall be added to cash book balance
Rs 4, 500 shall be added to cash book balance
Rs 4, 500 shall be deducted from cash book balance
Rs 9, 000 shall be deducted from cash book balance
- True
- False
In which column (Plus or Minus) you will write the following while preparing bank reconciliation statement from the credit balance of cash book.
(i) Cheques paid into the bank but not collected.
(ii) Interest on bank overdraft.
While preparing a bank reconciliation statement from the passbook overdraft balance, indicate whether the following item will be written in plus or minus column.
(i) Interest allowed by bank.
(ii) Insurance premium paid by bank.
State when cash book balance is lower than pass book balance.
While checking the bank statement against the cash book, you find that a direct debit for rent received from a tenant is missing from the cash book. How this is adjusted in the books?
Debit the rent account and credit the cash book
Debit the cash book and credit the rent income account
Not enter the direct debit as it only affects the bank statement
Debit the bank statement and credit the rent account
If starting point is cash book balance, deductions in bank pass book not given to effect in cash book are ___ while preparing BRS.
Added
Subtracted
Not required to be adjusted
None of the above
Standing orders for insurance premium of Rs 15, 000 to be paid every month shall be _____
Debited in cash book
Credited in cash book
Entered in bank statement
None of the above
The bank charged Rs 1, 000 as bank charges to a client & communicates the same to him. The accountant records it in the bank account in books. Later on, the bank realised that the charges were wrongly charged & corrects the same, but forgot to communicate the same to the client. If the accountant is starting with the bank balance as per bank account in books, what will be the treatment in Bank Reconciliation Statement to arrive at balance as per bank statement:
Subtracted Rs 1, 000
Add Rs 2, 000
None of the above
Add Rs 1, 000
Q11. Give journal Entries for the following adjustments in the final accounts :
(i) Insurance amounting to Rs. 2, 000 is paid in advance.
(ii) Commission earned but not received Rs. 1, 000.
(iii) Closing Stock Rs. 3, 000
(iv) Rs. 4, 000 for rent have been received in advance.
Mr. Ajay has taken an insurance policy from Bajaj Life Insurance Corporation & has given instruction to bank to pay the insurance premium monthly i.e. Rs 10, 000 by deducting the amount automatically from the account. The bank reconciliation statement was not prepared for 4 months by him & after 4 months the cash book & bank pass book showed a difference. What according to you could be the probability?
Amount in cash book is less by Rs 40, 000
Amount in cash book is more by Rs 40, 000
Amount in bank statement is more by Rs 40, 000
None of the above
There were standing instructions given to bank for payment of Rs 1, 00, 000 per month for 5 months to a supplier. The bank paid the supplier Rs 1, 00, 000 in the 6th month also which the supplier returned after 15 days in the same month. How should this be treated in the bank reconciliation statement?
Rs 1, 00, 000 shall be subtracted in cash book
Rs 1, 00, 000 shall be added in cash book
Rs 2, 00, 000 shall be added in cash book
None
What do you mean by Book-Keeping?
While checking the bank statement against the cash book, you find that a direct debit for rent is missing from the cash book.
Not enter the direct debit as it only affects the bank statement.
Debit the rent account and credit the bank account.
Debit the bank account and credit the rates account.
Debit the rent account and credit the bank statement
- True
- False
- Cannot be determined
- None of the above
A company wrote a cheque for Rs 760 and it cleared the bank for Rs 670. However, the company recorded the cheque in its cash book as Rs 760. How is the difference of Rs 90 handled on the bank reconciliation?
Not entered as it only affects the bank statement
Debit the bank statement
Credit the cash book by Rs 90
Debit the cash book by Rs 90
An entry recorded on both sides of cash book is known as ________ entry.
a) opening
b) rectifying
c) transfer
d) contra.
Rs 60 has been subtracted in our pass book on account of fees for issuing of new cheque book. How shall it be treated at the time of preparation of BRS?
Rs 60 shall be added
Rs 60 shall be subtracted
Rs 120 shall be added
Rs 120 shall be added
Which of the following needs to be debited in cash book, when they are reflected in pass book?
Bank charges
Interest debited
Interest credited
Clearing and processing charges
- The bank insists on it only when the party wants the payment immediately and that too in cash only.
- This is the instruction of RBI that all the cheques of the amount of Rs 10, 000 should be accepted only if they are crossed.
- It ensures that the money is deposited only in the amount of the person in whose name the cheque has been drawn.
- It is, a process by which the person who has issued the cheque comes to know whether the cheque is encashed or not.
Hi,
In triple coloumn cash book, when it is said -
1) Received cheque from Mr. X Rs. 125
2) Z paid us cheque Rs. 175
3) Received cheque for sales Rs. 200
should the amounts be written on the cash column or bank coloumn of the receipts (debit) side, assuming that all cheques were deposited in the bank on the day in which they are received.
Expecting a quick and clear answer.
Thanking you in advance.
Journalise the following:
2013
Dec. 5 Purchased a computer and paid by cheque Rs 250000
Dec. 24 Insurance premium paid by cheque Rs 4000
- Addition from book balance of cash
- Deduction from book balance of cash
- Addition from bank statement balance
- Deduction from bank statement balance
She advised by (A) us to meet the Chairman (B) and appraise him of (C) subordinate's misconduct. (D) No Error.(E)
- B
- C
- A
- D
- E
- double column cash book is prepared
- three column cash book is prepared
- single column cash book is prepared
- petty cash book is prepared