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Question

Which one of these is not a cause of difference in balance as per pass book and as per cash book?

A
Errors in cash book
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B
Errors in pass book
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C
Cheques deposited and cleared
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D
Cheques issued but not presented for payment
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Solution

The correct option is C Cheques deposited and cleared
Reconciliation of cash book and the bank passbook balance amounts to an explanation of differences between them. The difference between the cash book and the bank passbook is caused by:
(a) Timing Differences: It includes cheques issued by the bank but not presented for payment, direct debits made by the bank on behalf of the customer, etc.
(b) Differences caused by errors: It includes errors committed in recording transaction by the firm, errors committed in recording transaction by the bank.
Cash deposited and cleared is not a cause of difference in balances as per pass book and as per cash book.

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