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CSEET · Fundamentals of Accounting · Bank Reconciliation Statement

Rao Enterprises' cash book shows a bank overdraft of ₹15,000 on 31 March. Cheques issued of ₹6,000 have not been presented, cheques deposited of ₹9,000 have not been collected, and the bank has charged ₹500 as charges which are not yet entered in the cash book. The overdraft as per the passbook is:

The passbook overdraft is ₹18,500. Bank charges increase the cash book overdraft to ₹15,500, unpresented issued cheques of ₹6,000 reduce it to ₹9,500, and uncollected deposits of ₹9,000 increase it to ₹18,500.

  1. A₹12,500Correct
  2. B₹18,500
  3. C₹12,000
  4. D₹13,000

Explanation

Treat the overdraft as a negative balance of -15,000 in the cash book. First adjust for the bank charges in the cash book: -15,500. Then for unpresented cheques add 6,000: -9,500. Then deduct uncollected deposits 9,000: -18,500. So the passbook overdraft is ₹18,500. Option ₹12,500 comes from ignoring the sign of charges and the direction of the adjustments.

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