Endorsed cheques are always recorded on the payment side in the bank column.

True

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False

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Solution

The correct option is B False
Endorsement of a cheque means writing something on the back of the cheque with the intention of transferring the rights therein.
Endorsed cheques are always recorded on the payments side in the cash column (and not in the bank column) of the cash book. The endorsed cheques so received are treated as Cash-in-Hand and when these cheques are endorsed, then Cash A/c is credited. Thus, the above statement is false.

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Similar questions

State whether the following statements are TRUE or FALSE :

1. Total of payments side can be greater than total of receipts side in case of bank column.
2. Purchase of asset or stationery on credit is recorded in purchase book.
3. When goods are returned by buyer to seller, buyer sends a debit note.
4. Cheque received and deposited into bank on the same day is a contra entry.
5. Simple petty cash book is not very popular.
6. Interest on overdraft charged by bank is recorded in the cash column.
7. It is not necessary to record dishonor of cheques in the cash book.
8. Cheque book facility is available for fixed deposit account.
9. Businessman generally operates savings bank account.
10. A cash book is both a journal as well as ledger.
11. Cash book is a book of original entry.
12. Cash discount allowed is recorded on the debit side of cash book
13. Credit transactions are never recorded in cash book.
14. Endorsed cheques are always recorded on the payment side in the bank column.
15. A person who endorses the cheque is known as endorser.

Q. Prepare bank reconciliation statement of Dinesh on 30th June 2014 with following particulars:
(i) Pass Book showed an overdraft of ₹ 15,000 on 30th June 2014.
(ii) A cheque of ₹ 200 was deposited in bank but not recorded in Cash Book.
(iii) Cheques of ₹ 17,000 were issued but cheques worth only ₹ 10,000 were presented for payment up to 30th June 2014.
(iv) Cheques of ₹ 2,000 were received and recorded in Cash Book but not sent to bank.
(v) Cheques of ₹ 10,000 were sent to bank for collection; out of these cheques of ₹ 2,000 and of ₹ 1,000 were credited respectively on 8th July and 10th July and the remaining cheques were credited before 30th June 2014.
(vi) Bank paid ₹ 300 fee of Chamber of Commerce on behalf of Dinesh, which was not recorded in Cash Book.
(vii) Bank charged interest on overdraft ₹ 800 which was not recorded in Cash Book.
(viii) ₹ 40 for bank charges were recorded two times in Cash Book and bank expenses of ₹ 35 were not at all recorded in Cash Book.
(ix) Total of credit side of bank column of Cash Book was undercast by ₹ 1,000 by mistake.

Q. On 31st March, 2015 the Pass Book shows a credit balance of ₹ 9,000. Prepare a Bank Reconciliation Statement from the following particulars:-

	₹
1. Cheques issued but not yet presented for payment	7,000
2. Cheques issued but omitted to be recorded in the Cash Book	3,800
3. Cheques paid into bank but not yet collected by the bank	2,600
4. Premium on Life Policy paid by the bank on standing advice	360
5. Payments received from customers direct by the bank	2,000

Q. Prepare a Bank Reconciliation Statement as on 31st March 2015 from the following informations:

	₹
(a) Cash Book Balance (Overdraft)	12,500
(b) Cheques deposited but not recorded in Cash Book	2,000
(c) Cheque received but not sent to Bank	1,500
(d) Credit side of the Bank Column has been overcast	60
(e) Bank charges entered in Pass Book twice	75
(f) Bills Receivable directly collected by the Bank	4,000
(g) Deposited cheques returned dishonoured by Bank	1,700
(h) Electricity Bill paid by Bank as per instruction	800
(i) Cheques issued but not presented for payment	5,400
(j) Cheques deposited but not cleared	3,200

Q. Cash Book shows a balance of ₹ 12,500. On comparing the Cash Book with the Pass Book, following discrepancies were noted:

		₹
(i)	Cheques issued but not yet presented for payment.	6,000
(ii)	Cheques deposited in the bank but not collected.	9,000
(iii)	Bank paid insurance premium.	5,000
(iv)	Bank charges.	300
(v)	Directly deposited by a customer.	8,000
(vi)	Interest on investment collected by bank.	2,000
(vii)	Cash discount allowed of ₹ 200 was recorded on the debit side of the Bank column.

Prepare Bank Reconciliation Statement.

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