Question

The bank charged Rs 1,000 as bank charges to a client & communicates the same to him. The accountant records it in the bank account in books. Later on, the bank realised that the charges were wrongly charged & corrects the same, but forgot to communicate the same to the client. If the accountant is starting with the bank balance as per bank account in books, what will be the treatment in Bank Reconciliation Statement to arrive at balance as per bank statement:

• A. Add Rs 1,000
• B. Subtracted Rs 1,000
• C. Add Rs 2,000
• D. None of the above

Answer 1

The correct option is B

Subtracted Rs 1,000

It has to be subtracted in bank balance as per bank account as it has already been subtracted in cash book.