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Byju's Answer

Standard XII

Accountancy

Receipts and Payments Account

While adjusti...

Question

While adjusting the cash balance which one of the following is not taken into account?

Payment directly received by bank as per instructions

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Payment directly made by the bank as per standing instructions

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Mistake in cash book

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Mistake in pass book

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Solution

The correct option is C Mistake in pass book
When there is a difference between bank column of cash book and pass book, there may be confusion that which balance should be taken to "Balance Sheet" as "Bank Balance" while preparing financial statements.
Since there is a difference between bank column of cash book and pass book taking either of the two balances will not reflect a true picture of the "Bank Balance".

Therefore, at the end of the financial year, cash book must be adjusted for all the omissions/errors etc. It is known as "Adjusted Cash Book". Such adjusted cash book will be taken to balance sheet as "Bank Balance". No errors of the pass book will be taken into account while adjusting the cash balance.

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Q. Bank balance as per cash book (Dr.) of NZ & Co. was Rs.

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-Rs.

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Q. Prepare Bank Reconciliation Statement as on 30th September, 2016 from the following particulars:

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(i) Bank Balance as per Pass Book.	10,000
(ii) Cheque deposited into bank but no entry was passed in Cash Book.	500
(iii) Cheque received and entered in Cash Book but not sent to bank.	1,200
(iv) Insurance premium paid directly by the bank.	800
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Q. Bank balance as per cash book (Dr.) Rs.

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From the following particulars, find balance as per cash book as at March 31, 2018.
(i) Debit balance as per pass book Rs 8,250
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(iv) Dividend received directly into the bank account Rs 300

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