CA Foundation Exam June 2023 » CA MCQs » Bank Reconciliation Statement

Bank Reconciliation Statement

MCQs on "Bank Reconciliation Statement": Find the multiple choice questions on "Bank Reconciliation Statement", frequently asked for all competitive examinations.

The Bank Reconciliation Statement summarizes all the business activity, banking activities, and negotiating an entity of the bank account transactions. It’s all the transactions of the bank that are known as a record book with its financial records and various bank accounts. The Bank reconciliation statements are prepared to demonstrate all the payments processed. Another is to know that all the collected cash has been deposited into a bank account.

The Bank Reconciliation statement types are customer reconciliation, bank reconciliation, vendor reconciliation, business-specific reconciliation, and inter-company reconciliation. Let’s know some of the most imperative MCQs of the Bank Reconciliation Statement useful for your exams. 

MCQ On Bank Reconciliation Statement

1. The Cash Book debit balance is equivalent to?

    1.  Credit Balance as per passbook 
    2.  Overdraft as per Cash Book
    3.  Overdraft as per Pass Book
    4. None of the above

Ans: A. Credit Balance as per passbook 

(Note: When your cash book balance is debited, the passbook balance is a credit balance. As a result, both books’ balances will be favourable. Otherwise, it is unfavorable while it’s opposite to each other.)

2. How is the Bank Reconciliation Statement prepared? 

    1.  By matching entries in the passbook with entries in the bank and cash column of the cash book 
    2.  By matching the entries in the passbook with entries in the bank column of the cash book 
    3.  By matching the entries in the passbook with entries in the cash column of the cash book 
    4. None of the above 

Ans: C. By matching the entries in the passbook with entries in the bank column of the cash book 

(Note: So, the Back reconciliation statement is made by matching the entries in the passbook with entries in the bank column of the cash book.)

3. When the Cash amount as per the Cash Book is the beginning point, explicit deposits by the bank holder are known as?

    1. Subtracted 
    2.  Added
    3.  Not need to be adjusted
    4.  Neither of the two 

Ans: B.) Added

(Note: As you know, the passbook balance will increase due to the direct amount by the customer in the bank. The balance of the cash book will decrease with the same amount.)

4. The Bank Reconciliation Statement is the Part of?

    1.  Double-entry system
    2.  Not a Part of the Double-entry system
    3.  Bank Statement 
    4.  None of all of these 

Ans: B.) Not a Part of the double-entry system

(Note: You know very well that you are reconciling the balances through the Bank Reconciliation Statement. The Bank Reconciliation Statement is simple, and it is not a part of the Double-entry system.) 

  1. Who is preparing the Bank Reconciliation Statement?
    1. Debtor
    2.  Creditor 
    3.  Account Holder 
    4.  Bank 

Ans: C.) Account Holder 

(Note: The balances are simply reconciled by the accountant and account holder to match the cash book and passbook.) 

  1. Which amount of the following does not need to be adjusted into the cash book balance?
    1. Cheques mistakenly credited by the bank
    2.  Cheques deposited but not cleared
    3.  cheques issued but not showing
    4. All of these 

Ans: A.) Cheques mistakenly credited by the bank

(Note: Because the bank credited our account mistakenly for this amount, you do not need it. So you do not add it to the cash book balance for the adjustment.)

  1. If the Account holder deposits the cash in the bank, then it is known as?
    1. Expense
    2.  Liability
    3. Credit
    4.  Debit

Ans: C.) Credit 

(Note: The more courage you deposit in the bank, the bank’s liability will increase, and your bank balance will increase. So the cash book balance will be credited, and it’s known as a credit balance.)

  1. A Bank Reconciliation Statement is made up using the ……… from following which?
    1. The bank column of the Cashbook and the Bank Statement
    2.  The Cash column of the Cashbook and Bank statement
    3. Bank column of the cash book and cash column of the Cashbook
    4. None of all of the above 

Ans: A.) The bank column of the Cashbook and the Bank Statement

(Note: The Bank Reconciliation Statement is prepared with the help of the Bank Statement and the bank column of the Cashbook.) 

  1. The customer account is ………….when he withdraws the amount from the bank?
    1. Debited
    2.  No effect 
    3.  Credited 
    4. None of these 

Ans: A.) Debited

(Note: As you know, when cash is withdrawn from your bank account, money will reduce from your bank. So, it is known as a debited amount from the bank account.)

  1. What is the “deposit in transit” treatment in a bank reconciliation? 
    1. Recorded in books
    2. Recorded in banks
    3.  Subtracted from the cash book balance
    4. Subtracted from the Passbook balance

Ans: A) Added to the passbook balance

(Note: It is recorded in the cash book but not in the Passbook. So, your cash book balance has been increased, but it’s not recorded in Passbook. So, to reconcile the balance of both books, kindly record the balance in the Passbook.)

  1. “NSF” mark in the cheque sent back by the bank indicate?
    1.  No sufficient funds or money
    2.  The check has been rejected
    3.  The Cheque has been forged
    4. A bank could not verify the identity

Ans: A.) No sufficient funds or money

(Note: The full form of the NSF is not providing sufficient funds into your bank account. So, the NSF indicates no sufficient funds or money in your bank account.)

  1. Unpresented cheques are also known as?
    1.  Uncollected cheques
    2. Uncredited cheques
    3. Outstanding cheques 
    4.  None of all of the above

Ans: C.) Outstanding cheques 

(Note: The unpresented cheque means a cheque issue but not presented for payment into the bank. So, its amount is not debited from a bank account but is deducted from the cash book.) 

  1. If any cash balance is instantly deposited into the bank, then it is shown what?
    1. Cashbook will show a double balance 
    2. Cashbook will display less amount of the cash, and the Passbook will demonstrate the more balance
    3.  Passbook will show a double balance 
    4.  Cashbook will show increased balance, and the bank will show fewer

Ans.D) Cashbook will show less balance, and the bank will show more 

(Note: If the cash is deposited directly in your bank, the bank balance will increase. But if you do not enter it in your cash book, the amount will reduce.)

  1. If the Cash amount as per the passbook is the beginning point, then the rate of the bank interest will be permitted?
    1. Deducted
    2. Added 
    3.  No effect
    4.  None of all of these 

Ans: A.) Subtracted 

  1. What is the most prominent purpose of preparing the Bank Reconciliation Statement?
    1. To confirm the cash collections have been deposited into the bank suitably and the payments have been processed
    2.  To know about the balance of the PassBook 
    3.  To know about the balance of the Cashbook
    4.  None of all of these 

Ans: A.) The cash collections have been deposited into the bank suitably, and the payments have been processed

  1. What are the various steps to completing a bank reconciliation?
    1. Obtain bank records and Collect your company records
    2.  Find a place to start, check the income and expenses in your books, and Go over your bank withdrawals and deposits
    3.  Adjust the cash balance, Compare the end balances, and Adjust the bank statements
    4. All of the above points

Ans: D.) All of the above points

(Note: So, to end bank reconciliation, you have to need to collect your company records, locate a place to begin, get bank records, go over your bank withdrawals and deposits, Adjust the bank statements, Accommodate the cash balance, Check the expenses and income in your books, and Analogize the end balances.)

  1. The Balance of the replenished petty cash fund contains a credit to
    1. Petty Cash
    2.  Cash
    3. Freight-In
    4.  Postage Expense

Ans: B.) Cash Account

  1. The Balance of the reconciliation of the cash ledger book reconcile with the cash in the register is an example of
    1. Other rules
    2. Separate internal confirmation
    3. Establishment of duty
    4.  Segregation of responsibilities

Ans: B.) Separate internal confirmation

  1. Which of these below-given points is not an internal management method for cash?
    1. Cash is deposited daily
    2. There should be limited access to cash
    3.  Keep the amount of cash on hand to a minimum
    4.  Payments are made with cash

Ans: D.) Payments are made with cash

  1. Which of the below-given items on a bank statement reconciliation would need an adjusting entry on the company’s books?
    1. An error by the bank
    2. Outstanding checks
    3.  A bank service charge
    4.  A deposit in transit

Ans: C.) A bank service charge