Chapter 5 Recording of Transactions - Bank Reconciliation Statements

Short Answers

1. State the need for the preparation of bank reconciliation statement?

2. What is a bank overdraft?

3. Briefly explain the statement ‘wrongly debited by the bank’ with the help of an example.

4. State the causes of difference occurred due to time lag.

5. Briefly explain the term ‘favourable balance as per cash book’

6. Enumerate the steps to ascertain the correct cash book balance.

Long Answers

1. What is a bank reconciliation statement? Why is it prepared?

2. Explain the reasons where the balance shown by the bank passbook does not agree with the balance as shown by the bank column of the cash book.

3. Explain the process of preparing bank reconciliation statement with amended cash balance.