Skip to content

CMA Foundation · Fundamentals of Financial and Cost Accounting · Cash Book, Bank Book, Petty Cash Book, Bank Reconciliation Statement

A firm's cash book opened with cash Rs 8,000 and bank balance Rs 25,000 (debit). It deposited cash Rs 5,000 into the bank, then issued a cheque of Rs 12,000 to a supplier who allowed discount of Rs 300. Closing cash and bank balances are:

Closing cash is Rs 3,000 and bank is Rs 18,000. The Rs 5,000 deposit moves money from cash to bank, and the Rs 12,000 cheque reduces bank. Discount received is a nominal column total and does not change cash or bank balances.

  1. ACash Rs 3,000 and bank Rs 18,000Correct
  2. BCash Rs 3,000 and bank Rs 30,000
  3. CCash Rs 8,000 and bank Rs 18,000
  4. DCash Rs 3,000 and bank Rs 17,700

Explanation

The deposit is a contra entry: cash falls 8,000-5,000 = 3,000 and bank rises to 30,000. The cheque of Rs 12,000 reduces bank to 18,000. The discount is only a memo column and does not alter the bank balance, so 17,700 is wrong.

Did you get it right without looking?

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

Practise Cash Book, Bank Book, Petty Cash Book, Bank Reconciliation StatementFree diagnostic mock

More Cash Book, Bank Book, Petty Cash Book, Bank Reconciliation Statement questions