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Classifying Items of Financial Statements

Difference be...

Question

Difference between the bank balance as per Cash Book and Pass Book may be due to ____________.

A

Overdraft

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B

Float

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C

Factoring

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D

None of the Above

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Solution

The correct option is B Float
Float refers to the amount of money tied up between the time a payment is initiated and cleared funds become available in the company's bank account. The efficiency of firm's cash management can be enhanced by having knowledge and use of various procedures aiming at accelerating cash inflows and controlling cash outflows.

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Similar questions

The cash book shows a balance of Rs.11,000 which was different from the balance as per bank statement. The difference is found to be due to a credit entry in pass book amounting to Rs.2,000 for direct payment by a customer in bank account. What would be the balance as per bank pass book?

Q. The cash book shows a balance of

R s . 11, 000

which was different from the pass book balance. The difference is found to be due to a credit entry in pass book amounting to

R s . 2, 000

for direct payment by a customer and a debit of

R s . 250

for bank charges on collection of outstation cheques and other services. What would be the balance as per bank pass book?

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.

Q. Difference in balance as per pass book and balance as per cash book due to _____________ is termed as difference arising due to errors in recording the transaction and not a timing difference.

Q. Bank balance as per pass book (Cr.) Rs.

40, 000

. A comparison of pass book and cash book revealed the following:
- Rs.

2, 360

was wrongly debited by bank.
- Transfer by bank to another account with no advice Rs.

10, 000

.
Balance as per cash book will be _______ .

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