Read the following transactions and identify the cause of difference on the basis of time gap or errors made by business firm/ bank.Put a $(\sqrt)$ for the correct cause.
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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Solution

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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Similar questions

Q. From the following particulars a Bank Reconciliation Statement for the year ending on 31^stMarch 2011

(i) Bank balance as per Cash Book Rs 8,600
(ii) Cheques of Rs 4,000 issued but not presented for payment
(iii) Bank debited bank charges Rs 200
(iv) Cheque of Rs 2,800 deposited into the Bank but not Credited by Bank
(v) Bank paid Insurance Premium on our behalf directly Rs 2,500 not recorded in the Cash Book.
(vi) Bank Credited interest on investment Rs 1,900 but not recorded in the Cash Book.

Overdraft shown by the pass book of Mr Murli is Rs. 20,000. Prepare bank reconciliation statement on dated December 31, 2010.

(i) Bank charges debited as per pass book, Rs. 500,

(ii) Cheques recorded in the cash book but not sent to the bank for collection, Rs. 2,500.

(iii) Received a payment directly from a customer, Rs. 4,600.

(iv) Cheque issued but not presented for payment, Rs. 6,980.

(v) Interest credited by the bank, Rs. 100.

(vi) LIC paid by the bank, Rs. 2,500.

(vii) Cheques deposited with the bank but not collected, Rs. 3,500.

Overdraft shown by the passbook of Mr. Murli is Rs 20,000. Prepare bank reconciliation statement on dated December 31, 2017.

(i)	Bank charges debited as per passbook Rs 500.
(ii)	Cheques recorded in the cash book but not sent to the bank for collection Rs 2,500.
(iii)	Received a payment directly from customer Rs 4,600.
(iv)	Cheque issued but not presented for payment Rs 6,980.
(v)	Interest credited by the bank Rs 100.
(vi)	LIC paid by bank Rs 2,500.
(vii)	Cheques deposited with the bank but not collected Rs 3,500.

Following are the entries recorded in the Cash Book (Book Column) of Deepali Traders for the month ended 31st March, 2011.

Cash Book (Bank Column Only)
Dr.			Cr.
Date	Receipts	Rs	Date	Payments	Rs
2011 Mar. 15 21 22 31	To Cash A/c To Razak’s A/c To Kavita’s A/c To Balance c/d	36,000 24,000 10,000 7,640	2011 Mar.1 4 6 15 20	By Balance b/d By Jonny’s A/c By Roma’s A/c By Ashish ‘s A/c By Patil’s A/c	40,000 2,000 400 240 35,000
		77,640			77,640

On 31^st March 2011, Deepali Trader’s received the Bank Statement, on comparing it with the Cash Book following information was available.
(i) Cheque of Rs 10,000 deposited into the Bank not Credited by Bank.
(ii) Bank charges debited by Bank not entered in the Cash Book Rs 340.
(iii) Interest on Ovendraft debited Rs 1,000 by Bank but not recorded in the Cash Book
(iv) Bank transferred and credited Rs 200 in the Pass Book, not recorded in the Cash Book
(v) Cheques issued but not presented to the Bank Rs 37,400
(vi) Interest on Securities Rs 1,080 and Dividend on shares Rs 1,000 collected and Credited by Bank, not entered in the Cash Book.

Q. Rim Zim Ltd. maintains a current account with the State Bank of India. On 31st March, 2017, the bank column of its cash book showed a debit balance of ₹ 1,54,300. However, the bank statement showed a different balance as on that date. The following were the reasons for the difference :

		₹
(i)	Cheques deposited, but not yet credited by the bank	75,450
(ii)	Cheques issued, but not yet presented for payment	80,760
(iii)	Bank charges not yet recorded in the cash book	1,135
(iv)	Cheques received by the bank directly from trade debtors	1,35,200
(v)	Insurance premium paid by the bank as per standing instructions, but not yet recorded in the cash book	15,400
(vi)	Dividend collected by the bank, but not yet recorded in the cash book	1,000

Find out the balance as per the bank statement as on 31st March, 2017.

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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.