Direct Payments Made by Bank

Q.

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?

1. Not entered as it only affects the bank statement

2. Debit the bank statement

3. Credit the cash book by Rs 90

4. Debit the cash book by Rs 90

Q. An instruction to a bank to pay a specified amount at stated interval is a standing order.

1. True
2. False
3. Cannot be determined
4. None of the above

Q.

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?

1. Rs 60 shall be added

2. Rs 60 shall be subtracted

3. Rs 120 shall be added

4. Rs 120 shall be added

Q.

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:

1. Subtracted Rs 1, 000

2. Add Rs 2, 000

3. None of the above

4. Add Rs 1, 000

Q.

Standing orders for insurance premium of Rs 15, 000 to be paid every month shall be _____

1. Debited in cash book

2. Credited in cash book

3. Entered in bank statement

4. None of the above

Q.

Which of the following needs to be debited in cash book, when they are reflected in pass book?

1. Bank charges

2. Interest debited

3. Interest credited

4. Clearing and processing charges

Q.

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?

1. Rs 1, 00, 000 shall be subtracted in cash book

2. Rs 1, 00, 000 shall be added in cash book

3. Rs 2, 00, 000 shall be added in cash book

4. None

Q.

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?

1. Amount in cash book is less by Rs 40, 000

2. Amount in cash book is more by Rs 40, 000

3. Amount in bank statement is more by Rs 40, 000

4. None of the above

Q.

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?

1. Debit the rent account and credit the cash book

2. Debit the cash book and credit the rent income account

3. Not enter the direct debit as it only affects the bank statement

4. Debit the bank statement and credit the rent account

Q.

If starting point is cash book balance, deductions in bank pass book not given to effect in cash book are ___ while preparing BRS.

1. Added

2. Subtracted

3. Not required to be adjusted

4. None of the above