MP Board Class 11th Accountancy Important Questions Chapter 8 Bank Reconciliation Statement

by

MP Board Class 11th Accountancy Important Questions Chapter 8 Bank Reconciliation Statement

Bank Reconciliation Statement Important Questions

Bank Reconciliation Statement Short Answer Type Questions

Question 1.
Why is Bank Reconciliation Statement prepared?
Answer:
When it is found that there are some differences between the cash-book balance and passbook balance, these differences should be rectified. For this purpose, a statement is prepared on a particular date, which is known as Bank Reconciliation Statement.

Question 2.
What are the different methods of preparing B.R. statement ?
Answer:
The following are some of the methods of preparing B.R. statement:

  1. On the basis of debit balance as per cash – book
  2. On the basis of credit balance as per cash – book
  3. On the basis of debit balance as per passbook
  4. On the basis of credit balance as per passbook.

Question 3.
In a B.R. statement if the debit balance of a cash – book is given, which items to be added?
Answer:
The following items are added to the debit balance of a cash – book, when a B.R. statement is going to prepare:

  1. Cheques issued, but not presented for payment.
  2. Interest allowed by the bank, only entered in passbook.
  3. Dividends etc. collected and credited only in the passbook.
  4. A customer directly deposited in the customers account and only entered in pass¬book.
  5. Cheques issued and dishonoured but not entered in cash – book.
  6. Any wrong entry in credit side of passbook.

MP Board Solutions

Question 4.
Write five reasons why the cash – book balance and the passbook balance differ.
Answer:
Due to the following reasons, the cash-book balance and passbook balance may vary

  1. Cheques issued but not presented for payment
  2. Cheques deposited in the bank but not credited in the passbook
  3. Cheques deposited entered in the cash – book, but forget to sent the bank
  4. Interest on deposit allowed by the bank entered in the passbook but not in cash – book
  5. Bank charges charged by the bank only entered in the passbook and not in the cash-book.

Question 5.
Explain the advantages of Bank Reconciliation statement.
Or
Explain the benefits of preparation of Bank Reconciliation statement.
Or
Write the utility or importance of Bank Reconciliation statement.
Answer:
The following are the advantages of preparing B.R. statement:

  1. Discovery of errors – With the help of its preparation, the errors which might committed either in the cash – book or in the passbook can be discovered.
  2. Helps to enter the transactions in the cash – book – The bank provides various agency services to the customers. But sometimes the bank fails to inform him then and there. For this purpose, the statement will become useful.
  3. Wrong entry in passbook – By preparing the B.R. statement, the wrong entry made in the passbook can be found out.
  4. To find out the correct balance – By preparing the B.R. statement, the correct balance at bank can be ascertained.
  5. For audit purpose – For audit purpose, it is necessary to prepare B.R. statement.

Question 6.
Explain the four features of bank reconciliation statement.
Answer:
The different characteristics of B.R. statement are as follows:

  1. When there is difference between cash – book balance and passbook balance, B. R. statement is prepared
  2. It is prepared on a fixed date
  3. It is prepared by the bank’s customer and not the bank
  4. It can be make even on a sheet of paper
  5. The main aim of this statement is to the reveal the errors and compare it.

Question 7.
What are uncollected cheques? Explain.
Answer:
As soon as the cheques are received by a trader, he sends them to bank for collection. If the amount is not deposited in trader’s account in the bank till a bank reconcilation statement is prepared, such cheques are called uncollected cheques.

Question 8.
How a B.R. statement is prepared on the basis of balance as per cash – book?
Answer:
In the following ways, B. R. statement is prepared on the basis of cash – book balances. They are added to it:

  1. Cheques issued but not presented for payment.
  2. Interest on deposit etc. entered only in passbook.
  3. Wrong entry in the credit side of passbook.
  4. Dividend collected by bank only entered in passbook.
  5. The customer directly deposited the amount in the customers A/c.

The following items are deducted from the cash-book balance :

  1. Cheques, bills, drafts, etc. deposited for collection but not collected till date.
  2. Bank charges, commission, expenses, etc. charged by the bank only entered in passbook.
  3. Interest on overdraft and charges only in passbook.
  4. Bills discounted with the bank but dishonoured.
  5. Cheques debited in cash – book but forget to send them to the bank.

MP Board Solutions

Question 9.
How a B.R. statement is prepared by taking passbook balance?
Answer:
The debit balance of passbook means that the businessman (customer) has to give money to the bank or the customer has taken an overdraft from the bank and credit balance of passbook shows the deposit balance of the customers.When a B.R. statement is prepared the following points should be kept in mind. When the passbook shows a credit balance, the following items are added:

  1. Cheques deposited in the bank, but not collected there.
  2. Expenses paid by bank, commission charged, interest on overdraft, etc. entered only in the passbook and not in the cash-book.
  3. A discounted bill, dishonoured which was not entered in the cash-book.

The following items are deducted:

  1. Cheques issued but not presented for payment.
  2. Interest on deposit only entered in cash – book.
  3. Dividend collected by the bank not entered in cash – book.
  4. Direct deposit made by a customer not entered in cash – book.
  5. When the passbook shows a debit balance, added items will be deducted and deducted items be added.

Bank Reconciliation Statement Long Answer Type Questions 

Question 1.
What is B.R. statement? Explain fully why and how it is prepared?
Answer:
When it is found that there are some difference between the cash – book balance and passbook balance, it should be rectified by means of statement on a particular date. This statement is known as bank reconciliation statement. There are various reasons behind this difference of balances. But it must be necessary to find out and reconcile it. With this aim, the bank reconciliation statement is prepared.

Objects:

  1. To find out the real bank balance
  2. To know the amount of interest allowed by the bank on deposit
  3. To know the amount of interest charged on overdraft By the bank
  4. To find out whether there is any error in passbook or in cash – book.

The need of bank reconciliation statement is as follows:

  1. By comparing the passbook balance with cash – book balance, it can be easily known about any undue delay in the clearance of cheque.
  2. If any errors were committed, it can be found out by comparing the balances in the B. R. statement.
  3. By preparing B. R. statement, the trader can find out how many cheques were presented for payment out of his issue and how many of them were not presented for payment.
  4. B. R. statement shows the total amount of interest allowed by the bank on customer’s deposit.
  5. It show’s how many cheques were collected by the bank directly from trader’s customers.

It is prepared as follows:

  1. It is prepared on the basis of cash-book or passbook balance.
  2. If it is prepared on the basis of RB. balance, C.B. balance is ascertained and vice versa.

MP Board Class 11 Accountancy Important Questions