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CA Foundation · Accounting · Bank Reconciliation Statement

The pass book of Kapoor & Sons shows an overdraft of ₹15,000 on 31 December. Cheques issued for ₹9,000 have not been presented for payment, and cheques deposited for ₹4,000 have not yet been credited by the bank. What is the balance as per the cash book?

The cash book shows an overdraft of ₹10,000. Starting from the pass book overdraft of ₹15,000, unpresented cheques of ₹9,000 reduce the overdraft and uncredited deposits of ₹4,000 increase it, giving 15,000 − 9,000 + 4,000 = ₹10,000 overdraft.

  1. AOverdraft ₹10,000Correct
  2. BOverdraft ₹20,000
  3. COverdraft ₹28,000
  4. DFavourable balance ₹10,000

Explanation

Take the pass book overdraft as −15,000. Add cheques issued but not presented (+9,000) because the bank has not yet deducted them, and deduct cheques deposited but not credited (−4,000) because the bank has not yet added them. Cash book = −15,000 + 9,000 − 4,000 = −10,000, an overdraft of ₹10,000. Check: −10,000 − 9,000 + 4,000 = −15,000.

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