Test: Bank Reconciliation statement Total Marks: Q-1: Write short Answers (10) 1) 2) 3) 4) 5) What is a bank reconciliation statement?

What are the reasons that cash book balance doesnt agree with bank statement balance? What are Unpresented checks or outstanding checks? What is a Pass Book? Why do accountants prepare a bank reconciliation statement? (10)

Q-2: Choose correct answers.

1) Favorable balance of cash book implies that A) B) C) D) Credit balance of cash book Debit balance of cash book Bank overdraft Adjusted balance of cash book

2) A cash deposit made by business appears on the bank statement as _______ balance A) B) C) D) Debit Credit Expenses Liability

3) Bank reconciliation statement is the comparison of a bank statement (sent by bank) with the _________ (prepared by business) A) B) C) D) Cash receipt journal Cash payment journal Cash book Financial statements

4) A check returned by bank marked "NSF" means that A) B) C) D) Bank can't verify your identity There are not sufficient funds in your account Check has been forged Check can't be cashed being illegal

5) In the Bank reconciliation statement "Deposit in transit" is usually A) B) C) D) Subtracted from bank balance Added to bank balance Added to Cash book balance Subtracted from cash book balance

6) Bank reconciliation statement is prepared by A) B) C) D) Accountant of the business Manager of the business Controller of the bank Accountant of the bank

7) Which of the following error results in unadjusted cash book balance? A) B) C) D) Outstanding checks Unpresented checks Deposit in transit Omission of Bank charges

8) Bank charges amounting to $5000 was not entered in the cash book. Identify the correct adjustment in cash book A) B) C) D) Bank charges will be debited in cash book Bank charges will be added to cash book balance Bank charges will be credited in cash book Bank charges need no adjustment in cash book

9) Unpresented checks also referred as A) B) C) D) Uncollected checks Uncredited checks Outstanding checks Bounced checks

10) ________ are checks that are issued by the business but not yet presented to bank A) B) C) D) Uncollected checks Uncredited checks Outstanding checks Bounce Checks

Q-3: Prepare bank reconciliation statement from following data? (10) 1. Balance as per Cash Book (overdraft) Rs 25000 on 28 Feb 2013. 2. Out of cheques worth Rs. 15000, only Cheques worth Rs. 8000 presented for payment. 3. Cheques deposited into bank Rs 5000 are still not credited till March 3, 2013. 4. Bank Charges debited in the bank statement Rs 250. 5. Interested on investment collected by bank Rs 3500. 6. Check deposited into bank but dishonored worth Rs. 1500. 7. Insurance premium paid by bank Rs 2500. 8. Rs. 15000 are paid directly by a customer into the bank.