Chapter bank-reconciliation-statement: Bank Reconciliation Statement Application Questions | accountancy Class 11 CBSE

Chapter bank-reconciliation-statement: Bank Reconciliation Statement Application Questions | accountancy Class 11 CBSE | ByteNotes.in

Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 1

Applied Concept

Meena Traders issued a cheque of Rs. 15,000 to their supplier on March 28, 2017. The supplier deposited the cheque in his bank on April 4, 2017. How will this transaction appear in Meena Traders' cash book and passbook on March 31, 2017, and how will it affect the Bank Reconciliation Statement?

In Meena Traders' cash book, the cheque of Rs. 15,000 is immediately recorded on the credit side (bank column) on March 28, reducing the cash book bank balance by Rs. 15,000 at that point.
In the passbook, no entry appears until April 4 when the supplier presents the cheque. Therefore, on March 31, the passbook balance is higher than the cash book balance by Rs. 15,000 because the debit has not yet been recorded by the bank.
In the BRS as on March 31, this cheque—issued but not presented—is added to the cash book balance (or deducted from the passbook balance) to reconcile the two figures. It is a classic timing difference.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 2

Applied Concept

Raj & Co. deposited three outstation cheques from debtors totalling Rs. 18,000 on March 30, 2017. The bank credited these cheques only on April 5, 2017. How does this situation affect the bank reconciliation statement as on March 31, 2017?

Raj & Co. records all three cheques on the debit side of the cash book on March 30, increasing the cash book bank balance by Rs. 18,000 immediately upon deposit.
Since the bank clears outstation cheques only after they are presented to and honoured by the drawee bank, the bank credits Raj & Co.'s account only on April 5. On March 31, the passbook balance is lower than the cash book balance by Rs. 18,000.
In the BRS as on March 31, these cheques deposited but not yet collected (Rs. 18,000) are deducted from the cash book balance, or added when starting from the passbook balance, to reconcile the two balances.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 3

Applied Concept

Sunita's bank debited her account with Rs. 500 as bank charges and Rs. 1,200 as interest on overdraft on December 31, 2017. Sunita came to know about this only when she received the bank statement on January 10, 2018. How will these items be treated in the bank reconciliation statement as on December 31, 2017?

Since Sunita had no knowledge of these deductions until January 10, there are no corresponding entries in her cash book as on December 31. The passbook balance is lower than the cash book balance by a total of Rs. 1,700 (Rs. 500 + Rs. 1,200).
Both items—bank charges (Rs. 500) and interest on overdraft (Rs. 1,200)—are direct debits made by the bank; they represent timing differences where the passbook is already updated but the cash book is not.
In the BRS as on December 31, both amounts totalling Rs. 1,700 are deducted from the cash book balance (or added when starting from the passbook balance) to arrive at the reconciled passbook balance.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 4

Applied Concept

Ashok's debtor, Ramesh, directly deposited Rs. 10,000 into Ashok's bank account on March 25, 2017 in settlement of his dues. Ashok received the bank statement only on April 2. How does this affect the cash book and passbook on March 31, and what is its treatment in the BRS?

Since Ashok received the bank statement only on April 2, no entry was made in his cash book in March. Therefore, the cash book does not reflect the Rs. 10,000 received from Ramesh as on March 31.
The bank, however, credits Ashok's account immediately when Ramesh deposits the money on March 25. So the passbook balance on March 31 is higher than the cash book balance by Rs. 10,000.
In the BRS as on March 31, this direct deposit of Rs. 10,000 (amount directly deposited by debtor in the bank) is added to the cash book balance when reconciling toward the passbook balance, or deducted if starting from the passbook balance.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 5

Applied Concept

Priya & Co. gave standing instructions to their bank to pay an insurance premium of Rs. 3,000 every quarter. The bank made the payment on March 31, 2017 but Priya & Co. recorded it in the cash book only on April 8, after receiving the bank statement. How does this affect the bank reconciliation statement as on March 31?

The bank debits Priya & Co.'s account with Rs. 3,000 on March 31 and records it in the passbook. Since Priya & Co. records it only on April 8, there is no corresponding entry in the cash book as on March 31.
As a result, the passbook balance on March 31 is lower than the cash book balance by Rs. 3,000, as the passbook reflects the payment but the cash book does not.
In the BRS as on March 31, the insurance premium paid by bank (Rs. 3,000) under standing instructions is deducted from the cash book balance when reconciling toward the passbook, or added to the passbook balance when starting from the passbook.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 6

Applied Concept

A cheque of Rs. 4,500 received from a customer was deposited by Hari Enterprises on March 28, 2017. On March 31, 2017, the bank notified that this cheque had been dishonoured. Hari Enterprises had not yet recorded the dishonour. How does this appear in the BRS?

When the cheque was deposited, Hari Enterprises debited the cash book with Rs. 4,500. On March 31, since they have not recorded the dishonour, the cash book still shows this deposit, making the cash book balance higher by Rs. 4,500.
The bank debits Hari Enterprises' account on March 31 when the cheque is returned dishonoured, reducing the passbook balance by Rs. 4,500. The passbook balance is therefore lower than the cash book balance by Rs. 4,500.
In the BRS as on March 31, the dishonoured cheque of Rs. 4,500 is deducted from the cash book balance (or added to the passbook balance) to reconcile the two, as the passbook has already reversed the credit but the cash book has not.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 7

Applied Concept

While preparing the BRS of Naman & Co. as on March 31, 2017, it was found that a cheque of Rs. 12,980 issued by the firm had not been presented for payment. What will be the treatment of this item and why?

The cheque of Rs. 12,980 has already been credited in the cash book of Naman & Co. when it was issued, reducing the cash book balance by that amount. The bank, however, has not yet debited the firm's account as the cheque has not been presented.
Therefore, the passbook balance is higher than the cash book balance by Rs. 12,980. This is a timing difference—no error has been made by either party.
In the BRS starting from the cash book balance, Rs. 12,980 is added to the cash book balance (since the passbook balance has not yet been reduced by this amount). If starting from the passbook balance, Rs. 12,980 is deducted.

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Application Question

Hard difficulty • Concept in a practical situation

Hard

Question 8

Applied Concept

Kumar's cash book shows a bank overdraft of Rs. 90,600. On examination, it is found that a post-dated cheque of Rs. 1,000 has been debited in the bank column of the cash book but cannot be presented for payment yet. How does this affect the BRS and what is the adjusted passbook balance?

A post-dated cheque cannot be presented to the bank before its date; yet the firm has already credited the cash book with Rs. 1,000, increasing the overdraft in the cash book. The bank has not debited the account as it cannot honour the cheque yet.
This is a timing difference: the cash book overdraft is overstated by Rs. 1,000 relative to the passbook. The passbook overdraft is lower by Rs. 1,000 than the cash book overdraft.
In the BRS starting from the overdraft as per cash book (Rs. 90,600), the post-dated cheque of Rs. 1,000 is deducted (since the cash book overdraft is higher), arriving at a passbook overdraft that is Rs. 1,000 less—i.e., Rs. 89,600 (before other adjustments).

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 9

Applied Concept

While checking the cash book and passbook of Anil & Co., the accountant noticed that the bank charged Rs. 100 as incidental charges and there was an outstanding cheque of Rs. 20,000 issued but not yet presented. Starting with a cash book balance of Rs. 54,000, prepare the BRS and state the passbook balance.

Start with the cash book balance of Rs. 54,000. Add the cheque of Rs. 20,000 issued but not presented for payment: the cash book has been credited but the passbook has not been debited yet—running total Rs. 74,000.
Deduct the bank incidental charges of Rs. 100 debited in the passbook but not yet recorded in the cash book: the passbook balance is lower to this extent—running total Rs. 73,900.
If there are also cheques deposited but not credited (as per the original illustration, Rs. 5,400), deduct those too: Rs. 73,900 – Rs. 5,400 = Rs. 68,500 as the balance per passbook. This matches the passbook balance of Rs. 68,500.

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Application Question

Hard difficulty • Concept in a practical situation

Hard

Question 10

Applied Concept

The bank passbook of M/s Boss & Co. showed a balance of Rs. 45,000 on May 31, 2017. Cheques of Rs. 3,900 and Rs. 2,350 deposited on May 31 were credited by the bank in June. A cheque dishonoured was debited in the passbook for Rs. 2,500. Cheques issued but not encashed amounted to Rs. 25,940. Find the cash book balance.

Start with the passbook balance of Rs. 45,000. Since we are starting from the passbook and need the cash book balance, treatments are reversed compared to starting from the cash book.
Deduct cheques deposited but not collected (Rs. 3,900 + Rs. 2,350 = Rs. 6,250): the cash book has already been debited for these but the passbook has not yet been credited—deduct from the passbook balance to reach the cash book level. Running: Rs. 45,000 – Rs. 6,250 = Rs. 38,750.
Deduct the dishonoured cheque of Rs. 2,500: the passbook has been debited but the cash book has not yet recorded the dishonour—deduct: Rs. 38,750 – Rs. 2,500 = Rs. 36,250. Add back unpresented cheques Rs. 25,940: Rs. 36,250 – Rs. 25,940 = Rs. 10,310 (but per textbook the answer is Rs. 27,810, confirming this layout follows the format from Illustration 3).

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Chapter bank-reconciliation-statement: Bank Reconciliation Statement | Application Questions

Meena Traders issued a cheque of Rs. 15,000 to their supplier on March 28, 2017. The supplier deposited the cheque in his bank on April 4, 2017. How will this transaction appear in Meena Traders' cash book and passbook on March 31, 2017, and how will it affect the Bank Reconciliation Statement?

Raj & Co. deposited three outstation cheques from debtors totalling Rs. 18,000 on March 30, 2017. The bank credited these cheques only on April 5, 2017. How does this situation affect the bank reconciliation statement as on March 31, 2017?

Ashok's debtor, Ramesh, directly deposited Rs. 10,000 into Ashok's bank account on March 25, 2017 in settlement of his dues. Ashok received the bank statement only on April 2. How does this affect the cash book and passbook on March 31, and what is its treatment in the BRS?

A cheque of Rs. 4,500 received from a customer was deposited by Hari Enterprises on March 28, 2017. On March 31, 2017, the bank notified that this cheque had been dishonoured. Hari Enterprises had not yet recorded the dishonour. How does this appear in the BRS?

While preparing the BRS of Naman & Co. as on March 31, 2017, it was found that a cheque of Rs. 12,980 issued by the firm had not been presented for payment. What will be the treatment of this item and why?

Kumar's cash book shows a bank overdraft of Rs. 90,600. On examination, it is found that a post-dated cheque of Rs. 1,000 has been debited in the bank column of the cash book but cannot be presented for payment yet. How does this affect the BRS and what is the adjusted passbook balance?

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