If the balance as per Cash Book and Pass Book are the same, there is no need to prepare a Reconciliation Statement.

True

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False

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Solution

The correct option is A True
True. Bank reconciliation statement is prepared to reconcile the differences between the balances as per cash book and pass book. If the two balances match, then there is no need for a bank reconciliation statement.

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Q. A business firm periodically prepares a bank reconciliation statement to reconcile the bank balance as per the cash book with the pass book as these two show different balances for various reasons.

State whether the following Statements are True or False.

1) Bank Reconciliation Statement is prepared by Bank.
2) Bank Reconciliation Statement is prepared at the end of stipulated period.
3) Overdraft facility is allowed to proprietors personal account
4) Debit balance of Pass Book represents overdraft
5) Credit balance of Bank column of Cash Book represents the balance as per Cash book.
6) Bank charges debited by Bank increases bank balance in the Pass Book.
7) Interest credited in Pass Book is an income to the Customer.
8) Bank Reconciliation Statement is prepared to detect the errors the takes place in accounting

Prepare a bank reconciliation statement from the following information:
1. Overdraft balance as per cash book is Rs. 1,20,000.
2. Cheque deposited Rs. 30,000 but no entry was passed in cash book.
3. Bill discounted dishonoured for Rs. 20,000.
4. Bank charges of Rs. 50 entered in cash book twice.

Q. If the cash book balance is taken as starting point,the items which make the cash book balance smaller than the pass book must be _____for the purpose of reconciliation.

Q. Interest charged by the bank will be deducted when the overdraft as per pass book is the starting point for preparing the bank reconciliation statement to arrive at the balance as per cash book at the end.

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If the balance as per Cash Book and Pass Book are the same, there is no need to prepare a Reconciliation Statement.

The correct option is A TrueTrue. Bank reconciliation statement is prepared to reconcile the differences between the balances as per cash book and pass book. If the two balances match, then there is no need for a bank reconciliation statement.

The correct option is A True
True. Bank reconciliation statement is prepared to reconcile the differences between the balances as per cash book and pass book. If the two balances match, then there is no need for a bank reconciliation statement.