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Question
When balance as per cash book is the starting point, bank charges not recorded in cash book are ________.
When balance as per cash book is the starting point, bank charges not recorded in cash book are ________.
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Solution
The correct option is B Subtracted
Bank charges are those service charges which charged by the bank to the account holder for providing the banking services. The amount of such charges is directly debited to the bank account as per the calculation policy of the bank. Since the amount cannot be ascertained by the account holder, it is not recorded in the records maintained by them. Hence, in the reconciliation statement such amount is subtracted to get the closing balance as per bank pass book.
Bank charges are those service charges which charged by the bank to the account holder for providing the banking services. The amount of such charges is directly debited to the bank account as per the calculation policy of the bank. Since the amount cannot be ascertained by the account holder, it is not recorded in the records maintained by them. Hence, in the reconciliation statement such amount is subtracted to get the closing balance as per bank pass book.
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