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Questions and Answers
What is a possible cause of difference in balances between the Cash Book and Pass Book?
What is a possible cause of difference in balances between the Cash Book and Pass Book?
- Direct payments made by the bank on behalf of the customers
- Amounts directly deposited in the bank account
- Cheques issued by banks not yet presented for payments (correct)
- Interest and dividends collected by the firm
What is the purpose of a Bank Reconciliation Statement (BRS)?
What is the purpose of a Bank Reconciliation Statement (BRS)?
- To record all the transactions made by the firm and the bank
- To reconcile the balances as per cash book prepared by the firm and the balances as per pass book recorded by the bank (correct)
- To calculate the interest and dividends collected by the bank
- To identify errors made by the bank or the firm
What is an example of an error that may result in a difference in balances?
What is an example of an error that may result in a difference in balances?
- Cheques deposited/bills discounted dishonoured (correct)
- Direct debits made by the bank on behalf of the customer
- Cheques paid into the bank but not yet collected
- Recording the interest and dividends collected by the bank
Which of the following is a factor responsible for timing gaps in recording transactions?
Which of the following is a factor responsible for timing gaps in recording transactions?
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What is the need for bank reconciliation statements?
What is the need for bank reconciliation statements?
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