Account 3rd CA

What would be the result if a company fails to record bank charges in its cash book?

• The cash book balance will be higher than the bank statement balance

• The bank statement balance will be higher than the cash book balance

• No effect on the reconciliation

• The company’s cash book balance will match the bank statement balance

Which of the following would be a reason for a difference between the cash book and the bank statement?

• A post-dated cheque

• Bank interest earned

• Direct deposits made by customers

• All of the above

What is the effect of an unpresented cheque on the bank balance?

• It increases the bank balance

• It has no effect on the bank balance

• It decreases the bank balance

• It affects the company’s cash book balance only

Bank charges are typically--

• Added to the company’s cash book balance

• Subtracted from the company’s cash book balance

• Added to the bank statement balance

• Not included in the Bank Reconciliation Statement

What is the purpose of preparing a Bank Reconciliation Statement?

• To reconcile the cash book balance and bank statement balance

• To determine the exact bank balance

• To identify the company's assets

• To calculate the company's profits

Which of the following is not included in a Bank Reconciliation Statement?

• Bank overdraft

• Outstanding cheques

• Bank charges

• Depreciation

What is a Bank Reconciliation Statement?

• A statement showing the cash balance of a company

• A statement used to reconcile the bank balance with the company’s cash balance

• A statement of financial position

• A statement of the company's assets and liabilities

--are the major things that can cause disagreement between cash book and bank statement.

• When the customer didn't pay for goods bought

• When the debit side and the credit side are not balance

• The timing and information differences occur

• None of the above

A part of profit shared by shareholders that is paid directly into the the person's account is called what?

• Profit

• Shares

• Dividend

• All of the above

The correction for standing order is that

• Standing order must be added to cash book balance

• Standing order must be deducted from the cash book balance

• Standing order must be overlooked

• Standing order must receive extra charges before it can be deducted