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Question

When the overdraft as per Cash Book is the starting point, a cheque of Rs.1,00,000 deposited into Bank but not recorded in Cash Book will be:

A
Deducted by Rs. 1,00,000.
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B
Added by Rs.1,00,000.
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C
Added by Rs.2,00,000.
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D
Deducted by Rs. 2,00,000.
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Solution

The correct option is B Added by Rs.1,00,000.
Bank reconciliation statement is prepared by taking one of the balances of cash book or pass book, accommodating all the differences between the two and finally arriving at the other balance. Cheque deposited directly into the bank, without recording in the cash book increases the balance as per pass book as compared to cash book. So, when overdraft balance as per cash book is the starting point, a cheque of Rs. 1,00,000 will be added to arrive at the balance as per pass book.

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