Question

Difference in balance as per pass book and balance as per cash book due to ________ is/are termed as timing difference.

• A. cheque issued but not presented for payment
• B. interest and dividends collected by the bank
• C. direct payment by the bank/ customers
• D. all the three

Answer 1

Answer: (D)

all the three

When a business compares the balance of its cash book with the balance shown by the bank passbook, there is often a difference, which is caused by the time gap in recording the transactions relating either to payments or receipts. The factors affecting time gap includes:

1. Cheques issued by the bank but not yet presented for payment

2. Cheques paid into the bank but not yet collected

3. Direct debits made by the bank on behalf of the customer

4. Amounts directly deposited in the bank account

5. Interest and dividends collected by the bank

6. Direct payments made by the bank on behalf of the customers

7. Cheques deposited/bolls discounted dishonored