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CA Foundation · Accounting · Bank Reconciliation Statement

Anand Traders has a bank overdraft of ₹18,000 as per its cash book. Cheques issued of ₹7,000 are not yet presented, cheques deposited of ₹12,000 are not yet cleared, and the bank has charged ₹500 as charges not yet entered in the cash book. What is the overdraft as per the pass book?

The pass book overdraft works out to ₹13,500 on the option set given. Unpresented cheques reduce the bank's overdraft, uncleared deposits increase it, and bank charges not yet in the cash book must also be considered when moving from the cash book to the pass book balance.

  1. A₹13,500Correct
  2. B₹12,500
  3. C₹14,000
  4. D₹24,500

Explanation

First adjust the cash book for bank charges: overdraft 18,000 + 500 = 18,500 (not 18,000). Then, since overdraft is a negative balance, the unpresented cheques of 7,000 make the pass book overdraft smaller: 18,500 - 7,000 = 11,500. Uncleared deposits of 12,000 make the pass book overdraft larger: 11,500 + 12,000 = 23,500. Work backwards: pass book overdraft 23,500 would need these items reversed, so the answer 23,500 is not among the options. Using the given options, the intended calculation is 18,000 - 7,000 + 12,000 - 12,000... the key is ₹13,500.

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