Chapter MCQ Test 2 — Bank Reconciliation Statement
10 Questions • 12 min • Chapter MCQ
12:00
Question 1 of 10
Cash book (Dr) balance Rs 50,000. Cheques issued not presented Rs 12,000; cheques deposited not cleared Rs 7,000; bank charges Rs 300. The pass book balance is:
Rs 54,700
Rs 45,000
Rs 50,000
Rs 69,300
Explanation: 50,000 + 12,000 − 7,000 − 300 = 54,700.
Question 2 of 10
Starting from a PASS BOOK balance instead of the cash book, the sign of every adjustment must be:
Reversed compared with starting from the cash book
Kept the same
Always added
Always subtracted
Explanation: Because you are travelling the opposite direction, each add becomes a less and vice-versa.
Question 3 of 10
A trader's pass book shows Rs 9,000 but his cash book shows Rs 9,500. The most likely single cause is:
A cheque of Rs 500 deposited but not yet cleared
A cheque issued not presented Rs 500
Interest credited by bank Rs 500
Bank charges of Rs 500 not recorded by us
Explanation: We added the Rs 500 deposit to our cash book but the bank hasn't credited it, making our balance higher by 500.
Question 4 of 10
Why can 'cheques issued but not presented' never be entered in the firm's own cash book to fix the difference?
The entry was already made when issued; clearing depends on the payee/bank
Cheques cannot be recorded
It is the bank's secret
It is an error
Explanation: The firm correctly reduced its cash book when it issued the cheque; the lag is the bank's action, not a missing entry.
Question 5 of 10
An overdraft as per the cash book is Rs 20,000 (credit). A cheque issued but not presented Rs 4,000. Treating the overdraft as −20,000, the pass book overdraft is:
Rs 16,000 overdraft
Rs 24,000 overdraft
Rs 4,000 favourable
Nil
Explanation: Start −20,000; cheque not presented +4,000 → −16,000, i.e. an overdraft of Rs 16,000 in the pass book.
Question 6 of 10
In the adjusted cash book method, which item is NOT entered in the adjusted cash book?
Cheques deposited but not yet cleared
Bank charges
Interest collected by the bank
A dishonoured cheque
Explanation: Pure timing items (uncleared deposits) stay for the BRS; only items the firm had genuinely missed are adjusted in the cash book.
Question 7 of 10
A BRS is useful chiefly because it:
Detects errors and frauds and confirms both records
Increases the bank balance
Avoids paying charges
Replaces the cash book
Explanation: Reconciling the two records surfaces errors, omissions or fraud and gives assurance that both are reliable.
Question 8 of 10
The bank wrongly debited the firm's account with another customer's cheque of Rs 1,000. Starting from the cash book balance, this is:
Subtracted (the pass book is lower by 1,000 due to the bank's error)
Added
Ignored
Doubled
Explanation: The bank's wrong debit makes the pass book balance lower, so it is deducted when moving from cash book to pass book.
Question 9 of 10
After preparing an adjusted cash book, the corrected balance is then used to:
Start a short BRS containing only uncleared/unpresented cheques
Prepare the trial balance only
Replace the pass book
Cancel the bank account
Explanation: The adjusted balance reconciles to the pass book using just the remaining timing items.
Question 10 of 10
If, after a correct BRS, the two balances still will not reconcile, the likeliest reason is:
An undetected error in the cash book or pass book
Inflation
A tax change
The bank is closed
Explanation: Once all timing items are accounted for, a remaining gap points to an arithmetical or recording error somewhere.