Differences caused by errors are ___________.

interest and dividends collected by the bank

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errors committed in recording transaction by the firm

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direct payments made by the bank on behalf of the customers

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errors committed in recording transactions by the bank

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Solution

The correct options are
A errors committed in recording transactions by the bank
C errors committed in recording transaction by the firm
A bank reconciliation statement compares the balances of cash book which is prepared by the firm and the pass book which is prepared by the bank. It is prepared to identify the errors and differences between the two balances. Thus differences caused by errors are either errors committed in recording transactions by the firm or errors committed in recording transactions by the bank.

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Similar questions

What are the different types of errors that are usually committed in recording business transactions?

What are the different types of errors that are usually committed in recording business transaction?

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S.N	Transactions	Time Gap	Errors made by business / bank
1 2 3 4 5	Cheque issued to customer but not presented for payment. Cheque amounting to Rs.5,000 issued to M/s XYZ but recorded as Rs.500 in the cash book. Interest credited by the bank but not yet recorded in the cash book. Cheque deposited into the bank but not yet collected by the bank. Bank charges debited to firm's current account by the bank.

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