Skip to content

CSEET · Fundamentals of Accounting · Bank Reconciliation Statement

A customer of Sharma Traders directly deposited ₹12,000 into the firm's bank account, and the bank credited it. Sharma Traders has not yet learnt of this deposit. What is the effect on the two balances?

The pass book balance exceeds the cash book balance by ₹12,000. The bank has credited the direct deposit, but the firm has not yet recorded it in its cash book, so only the bank's record shows the increase until the firm makes the entry.

  1. APass book balance exceeds cash book balance by ₹12,000Correct
  2. BCash book balance exceeds pass book balance by ₹12,000
  3. CPass book balance is lower than cash book balance by ₹24,000
  4. DThere is no difference between the two balances

Explanation

The bank has increased the pass book balance by ₹12,000. The firm has made no entry, so the cash book is lower by ₹12,000. Option B reverses the direction, and the amount is not doubled because only one record has been updated.

Did you get it right without looking?

One question tells you little. A timed set on Bank Reconciliation Statement shows your real accuracy, how long you take and where you lose marks.

Practise Bank Reconciliation StatementFree diagnostic mock

More Bank Reconciliation Statement questions