BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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to ensure no transactions had been omitted from the cash book.
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to establish the value of unpresented cheques.
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to explain the difference between the cash book balance and the bank statement balance.
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to find out if any cheques had been dishonoured.
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Detailed explanation-1: -Bank reconciliation statement is prepared to reconcile the balances as per cash book (bank column) and pass book (bank statement) by identifying the causes of differences between the two. It, in no way detects the errors that take place in accounting while book keeping.
Detailed explanation-2: -Bank Reconciliation Statement is prepared to reconcile the difference between the bank Balance shown by the Cash Book and Bank Pass Book. Definition: A schedule showing the items of difference between the bank statement and the bank column of Cash Book is known as Bank Reconciliation Statement.
Detailed explanation-3: -Question Bank Reconciliation Statement is prepared so that the difference between the undermentioned balances can be reconciled: (a) Difference in the balance in the bank and the cash balance.
Detailed explanation-4: -Some of the reasons for a difference between the balance on the bank statement and the balance on the books include: Outstanding checks. Deposits in transit. Bank service charges and check printing charges.