BRS MCQ - CA FOUNDATION

 BANK RECONCILIATION STATEMENT 

MCQ

1) Bank Reconciliation Statement is prepared to arrive at the Bank Balance.

Ans:-  FALSE

A bank reconciliation statement is prepared to Reconcile the balances as per cash book (bank column) and passbook (bank statement) by identifying the causes of difference between the two for a particular period. it is prepared with the objective of reconciliation and not to arrive at the bank balance.

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2) Direct collection received by the bank on behalf of its customers will increase the balance as per the Bank Pass-book as compared to the balance as per the Cash-book.

Ans:- TRUE 

The direct collection received by the bank will increase the balance as per the passbook as the bank will credit the passbook as the funds are transferred into the customer's bank account. This increases the bank passbook balance as compared to the cash book balance as the customer has no information about such transaction and has not recorded it in the cash book. This difference in balance arises due to the time difference in the recording of the transaction.

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3) Interest charged by the bank will be deducted, when the overdraft as per the cash book is made the starting point for making, the bank reconciliation statement.

Ans:- FALSE

Interest charged by the bank will be added when the overdraft as per the cash book is taken as the starting point for preparing the bank reconciliation statement. Interest charged by the bank is an expense for the business which reduces the balance as per the passbook. The business has not recorded this transaction in the cash book yet as it has not received any information about it. So, to arrive at the balance as per the passbook, it is added to the overdraft balance as per the cash book.