A bank reconciliation statement is mainly prepared to ___________.

Reconcile the cash balance of the cash book

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Reconcile the difference between the bank balance shown by the cash book and bank pass book

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Both (A) and (B)

No worries! We‘ve got your back. Try BYJU‘S free classes today!

None of the above

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is B Reconcile the difference between the bank balance shown by the cash book and bank pass book
Whenever money is deposited in bank or withdrawn from bank it is recorded in two places.
The passbook maintained by the bank
The cash book (bank column ) maintained by the account holder.
These two books are opposites of each other which means if one shows credit balance then the other would reflect a debit balance of the exact same amount. But due to reasons like timing differences the balances of both these books do not match. Now, it is not practical and feasible for the bank to reconcile the account balances of each and every account holder so, the account holder prepares a bank reconciliation statement for his account maintained in the bank.

Suggest Corrections

Similar questions

Q. A business firm periodically prepares a bank reconciliation statement to reconcile the bank balance as per the cash book with the pass book as these two show different balances for various reasons.

Q. ________ is a statement which is prepared as on a particular date to reconcile the bank balance as per cash book with balance as per pass book by showing all the causes of difference between the two.

Explain the process of preparing a bank reconciliation statement with amended cash balance.

State whether the following Statements are True or False.

1) Bank Reconciliation Statement is prepared by Bank.
2) Bank Reconciliation Statement is prepared at the end of stipulated period.
3) Overdraft facility is allowed to proprietors personal account
4) Debit balance of Pass Book represents overdraft
5) Credit balance of Bank column of Cash Book represents the balance as per Cash book.
6) Bank charges debited by Bank increases bank balance in the Pass Book.
7) Interest credited in Pass Book is an income to the Customer.
8) Bank Reconciliation Statement is prepared to detect the errors the takes place in accounting

Q. While preparing bank reconciliation statement, balance of bank account shall be taken from for matching the same with cash book.

Join BYJU'S Learning Program