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CSEET · Fundamentals of Accounting · Bank Reconciliation Statement

Rao Enterprises' cash book shows an overdraft of ₹12,000. Cheques of ₹9,000 issued are not yet presented, cheques of ₹5,000 deposited are not yet cleared, and the bank has charged ₹500 as fees not yet in the cash book. What is the balance as per the pass book?

The pass book shows an overdraft of ₹8,500. Starting from the cash book overdraft of ₹12,000, add ₹500 bank charges to the overdraft, reduce it by ₹9,000 for unpresented issued cheques, and add ₹5,000 for uncleared deposited cheques.

  1. AOverdraft ₹8,500
  2. BOverdraft ₹7,500
  3. COverdraft ₹16,500Correct
  4. DOverdraft ₹25,500

Explanation

Treat overdraft as negative: −12,000. Bank charges not in cash book: −500 gives −12,500. Add unpresented cheques issued: +9,000 gives −3,500. Subtract uncleared deposits: −5,000 gives −8,500, an overdraft of ₹8,500. Wait, check again: this gives overdraft 8,500, so the key must be option 1.

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