A cheque of Rs 15,000 was received from a customer Mr. Ram & it was sent for clearance to bank on the same day. Next day, Mr. Ram informed us that the amount has been deducted from his account, so the entry to this regard was made in the books. But later on, it was discovered that the amount has not been credited in our account but credited to some one else's account due to a mistake by the bank. It was credited to our account in the next month. How should this be treated in the bank reconciliation of both the months if starting point is cash book balance?

Rs 15,000 shall be subtracted in both the months

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Rs 15,000 shall be added in both the months

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Rs 15,000 shall be subtracted in 1st month & added in next month

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Rs 15,000 shall be subtracted in 2nd month & added in first month

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Solution

The correct option is C
Rs 15,000 shall be subtracted in 1st month & added in next month

Rs 15,000 shall be subtracted in 1st month & added in next month.

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Similar questions

Q. Pass the rectification entries for the following transactions:
(i) An amount of ₹ 2,000 received from Mohan on 1st April, 2017 had been entered in the Cash Book as having been received on 31st March, 2017.
(ii) The balance in the account of Mr. Rahim ₹ 1,000 had been written off as bad but no other account has been debited.
(iii) An addition in the Returns Inward Book had been cast ₹ 100 short.
(iv) A cheque for ₹ 200 drawn for the Petty Cash Account has been posted in the account of Asif.
(v) A discounted Bill of Exchange for ₹ 20,000 returned by the firm's bank had been credited to the Bank Account and debited to Bills Receivable Account. A cheque was received later from the customer for ₹ 20,000 and duly paid.
(vi) Ramesh's Account was credited with ₹ 840 twice instead of once.

Q. Prepare Bank Reconciliation Statement from the following:
On 31st March, 2019, a merchant's Cash Book showed a credit bank balance of ₹ 10,500 but due to the following reasons the Pass Book showed a difference:
(i) A cheque of ₹ 540 issued to Mohan has not been presented for payment.
(ii) A post-dated cheque for ₹ 100 has been debited in the bank column of the Cash Book but under no circumstances was it possible to present it.
(iii) Four cheque of ₹ 1,200 sent to the bank have not been collected so far. A cheque of ₹ 400 deposited in the bank has been dishonoured.
(iv) As per instructions, the bank paid ₹ 50 as Fire Insurance premium but the entry has not been made in the Cash Book.
(v) There was a debit in the Pass Book of ₹ 15 in respect of bank charges and a credit of ₹ 25 for interest on Current Account but no record exists in the Cash Book.
(vi) Cheque of ₹ 5,000 dated 15th April, 2019 issued to M & Co. was dishonoured being post dated. It was also not recorded in the books of account yet.

Cheque paid into bank were of Rs 25,000 but the cheque of Rs 10,000 were cleared & credited in our account by bankers which was evident from the bank statement received on the last day of the month. If closing balance as per cash book is Rs 50,000, what will be the balance after the above situation?

Q. The Bank Column of Mukesh's Cash Book as on 31st March, 2018 showed an overdraft of Rs. 1,80,000. His Bank Statement Showed an overdraft of Rs. 1,13,900. Prepare Bank Reconciliation Statement taking the following into account:
(i) Cheque deposited into bank but entry is not passed in the Cash Book. Rs. 3000.
(ii) Cheque received and entered into the Cash Book but was not sent to bank. Rs. 10,000.
(iii) Credit side of the Bank column casted short by Rs. 1,000
(iv) Insurance premium paid directly by the bank under standing instructions was not recorded in the Cash Book. Rs. 5,000
(v) Bank charges entered in the Cash book twice. Rs. 100
(vi) Cheque 'received' returned on technical grounds but entry was not passed. Rs. 4,000
(vii) Cheque 'issued' returned on technical grounds but entry was not passed. Rs. 3,000
(viii) Bill discounted dishonoured. Rs. 40,000
(ix) Bills Recievable directly collected by the bank. Rs. 20,000
An amount of Rs. 1,00,000 being collection of Mahesh's cheque was wrongly credited to the account of Mukesh by the bank in his bank statement.

Q. Prepare Bank Reconciliation Statement from the following:
On 31st March, 2018, a merchant's Cash Book showed a credit bank balance of ₹ 10,500 but due to the following reasons the Pass Book showed a difference.
(i) A cheque of ₹ 540 issued to Mohan has not been presented for payment.
(ii) A post-dated cheque for ₹ 100 has been debited in the bank column of the Cash Book but under no circumstances was it possible to prove it.
(iii) Four cheque for ₹ 1,200 sent to the bank have not been collected so far. A cheque of ₹ 400 deposited in the bank has been dishonoured.
(iv) As per instructions, the bank paid ₹ 50 as Fire Insurance premium but the entry has not been made in the Cash Book.
(v) There was a debit in the Pass Book of ₹ 15 in respect of bank charges and a credit of ₹ 25 for interest on Current Account but no record exists in the Cash Book.
(vi) Cheque of ₹ 5,000 dated 15th April, 2018 issued to M & Co. was dishonoured being post dated. It was also not recorded in the books of account yet.

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The correct option is C Rs 15,000 shall be subtracted in 1st month & added in next month Rs 15,000 shall be subtracted in 1st month & added in next month.

The correct option is C
Rs 15,000 shall be subtracted in 1st month & added in next month

Rs 15,000 shall be subtracted in 1st month & added in next month.