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CMA Foundation · Fundamentals of Financial and Cost Accounting · Journal and Ledger

Sharma Stores had a cash book bank balance of Rs 42,000 (debit) on 1 April. During April it deposited cash of Rs 15,000 into the bank, received a cheque of Rs 8,000 from a customer and banked it, and issued a cheque of Rs 12,500 to a supplier. It also withdrew Rs 5,000 from the bank for office use. What is the bank balance as per the cash book at the end of April?

The closing bank balance is Rs 47,500. Receipts into the bank are 42,000 opening plus 15,000 cash deposited plus 8,000 cheque, totalling 65,000. Payments are 12,500 to the supplier and 5,000 withdrawn, totalling 17,500. The difference is Rs 47,500.

  1. ARs 47,500Correct
  2. BRs 52,500
  3. CRs 42,500
  4. DRs 47,000

Explanation

Receipts are 42,000 + 15,000 + 8,000 = 65,000. Payments are 12,500 + 5,000 = 17,500. Balance = 65,000 - 17,500 = Rs 47,500. Rs 52,500 results if the Rs 5,000 withdrawal is wrongly treated as a receipt in the bank column, and Rs 42,500 results from omitting the deposit and cheque banked.

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