CHAPTER-10 BANK RECONCILIATION STATEMENT (BRS)

MULTIPLE CHOICE QUESTIONS (MCQ’S)

QUESTIONS
Q.1 The following bank reconciliation statement has been prepared by a business.
Bank reconciliation statement as at April 30, 2018 Rs.
Balance as per bank statement (Cr) 45,200
Add: Outstanding cheques 11,500
Less: Uncleared lodgements 13,100
Balance as per cash book (Dr) 43,600
Assuming that all items other than balance as per cash book is correct; what is the correct balance as
per cash book?
(a) Rs.43,600 Dr as per statement in question (b) Rs.43,600 Cr
(c) Rs.46,800 Dr (d) Rs.46,800 Cr
Q.2 Debit balance of Rs.5,000 as per bank statement means:
(a) Rs.5,000 payable to business by the bank
(b) Rs.5,000 receivable from business by the bank
(c) Rs.5,000 deposited by the business during the month
(d) Rs.5,000 withdrawn from the bank by business during the year
Q.3 The following bank reconciliation statement has been prepared by a trainee accountant:
Rs.
Overdraft as per bank statement 6,980
Less: Outstanding cheques 10,460
3,480
Add: Deposits credited after date 11,800
Cash at bank as per cash book 15,280
What should be the correct balance as per cash book?
(a) Rs.15,280 balance at bank as stated (b) Rs.5,640 balance at bank
(c) Rs.15,280 overdrawn (d) Rs.5,640 overdrawn
Q.4 At the end of 31 March 2019, balance as per cash book of Imtiaz is Rs.10,200 (Dr) which did not agree
with the balance as per the bank statement. On investigation following information was identi�ied;
A standing order of Rs.350 was paid by the bank did not appear in the cash book.
Dividend received directly in the bank was Rs.30
Bank credited interest for the quarter Rs.350; it was included in cash book as Rs.530
A customer cheque deposited in the bank Rs.120 was dishonoured
What is the corrected balance as per cash book?
(a) Rs.10,170 Dr (b) Rs.10,170 Cr
(c) Rs.9,580 Dr (d) Rs.9,580 Cr
Q.5 A business identi�ied that there is a difference between balance of cash book and the balance as per
bank statement at end of 28 February 2019. On investigation it was revealed that:
Bank debits account of business for bank charges Rs.30 and standing order Rs.150.
Bank erroneously debits bank account of business for a cheque of Rs.40.
Business has credited the bank account for quarterly interest income Rs.150.
What is the total amount of adjustment to be made in cash book of business?
(a) Rs.180 Cr and Rs.150 Dr (b) Rs.180 Cr and Rs.300 Dr
(c) Rs.220 Cr and Rs.300 Dr (d) Rs.220 Dr and Rs.300 Cr

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Q.6 Balance of bank account as per cash book is Rs.35,000 (Dr) while balance as per bank statement is
Rs.32,500 (Cr). Difference is explained as Uncleared lodgments of Rs.2,500 not included in the bank
statement.
What is the amount of bank balance to be reported in Statement of �inancial Position?
(a) Rs.35,000 Cash at bank (b) Rs.35,000 Overdraft
(c) Rs.32,500 Cash at bank (d) Rs.32,500 Overdraft
Q.7 A business is in process of reconciling its cash book with banks statement.
Which of the following item require entry in cash book?
(a) Bank service charges
(b) Deposits credited by the bank after the date of the bank statement
(c) Cheque of another account erroneously credited by bank
(d) Cheques presented by suppliers after the date of bank statement
Q.8 A business is in process of preparing its bank reconciliation statement. The balance of cash book did
not agree with the balance in bank statement. The following information is available:
• Balance as per cash book before comparing bank statement Rs.11,000 (Dr)
• Outstanding Cheques Rs.1,550
• Outstanding lodgments Rs.1,200
• Bank charges Rs.50
• Bank interest income Rs.100
What is the balance as per bank statement?
(a) Rs.11,200 Dr (b) Rs.11,400 Dr
(c) Rs.11,400 Cr (d) Rs.11,200 Cr
Q.9 A business received a bank statement showing a credit balance of Rs.7,400. On investigation its
accountant discovered that the bank statement does not show cheques received from customers
Rs.16,200 and banked and same for cheque payments to suppliers Rs.18,500. The bank statement also
shows bank charges of Rs.250 which has not yet been recorded in ledger.
What is the current balance as per cash book?
(a) Rs.5,350 Cr (b) Rs.5,350 Dr
(c) Rs.5,100 Dr (d) Rs.5,100 Cr
Q.10 Following information has been collected from the books of Murtaza as at 31 January 2019:
Balance as per cash book Rs.15,000 (Dr)
On scrutiny of bank statement it was found:
• Unpresented Cheques Rs.2,500
• Uncredited lodgements Rs.1,500
• Bank charges Rs.200
• Bank debits Muratza for bank interest Rs.120 instead of Rs.150. No amount was recorded in
cash book of Murtaza
Further it was found that:
• Receipt of Rs.1,500 was recorded on credit side of cash book
• Payment of Rs.1,200 was recorded on debit side of cash book
What is the corrected cash book balance of Murtaza?
(a) Rs.15,370 Dr (b) Rs.15,250 Dr
(c) Rs.15,250 Cr (d) Rs.15,370 Cr

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Q.11 A bank statement shows a balance of Rs.4,000 in credit. On examining the bank statement, it was found
that the cheques of Rs.600 deposited in bank as per the cash book not yet on the bank statement and
cheques of Rs.1,000 issued out but not yet appeared on the bank statement.
Furthermore, the cash book shows deposit interest received of Rs.100 but this is not yet on the
statement.
What is the balance as per cash book?
(a) Rs.3,700 (b) Rs.4,500
(c) Rs.5,000 (d) Rs.3,900
Q.12 If it was found that the receipt side of the cash book has been under-casted, then in preparing bank
reconciliation statement, it should be:
(a) Deducted from balance as per cash book
(b) Added in balance as per bank statement
(c) Added in balance as per cash book
(d) Deducted from balance as per bank statement
Q.13 Which of the following statements is correct?
(a) Credit balance as per bank statement means a bank overdraft
(b) Debit balance as per bank statement means a bank overdraft
(c) Debit balance as per cash book means a bank overdraft
(d) Credit balance as per cash book means an asset
Q.14 Which of the following require deduction from cash book balance while preparing bank reconciliation
statement?
(a) Direct deposit by a customer into bank but entered in cash book
(b) Standing orders paid by the bank not yet entered in cash book
(c) Unpresented cheques not yet paid by bank
(d) Bank debits interest Rs. 2,500 instead of Rs. 5,200
Q.15 The following information relates to bank reconciliation:
(i) The bank balance in the cash book before taking the items below into account was Rs.9,870
overdrawn
(ii) Bank charges of Rs.750 on the bank statement have not been entered in the cash book
(iii) The bank has credited the account in error with Rs.645 which belongs to another customer
(iv) Cheque payments totaling Rs.4,385 have been entered in the cash book but have not been
presented by payment
(v) Cheques totaling Rs.6,500 have been correctly entered on the debit side of the cash book but
have not been paid in at the bank
What was the balance as shown by the bank statement?
(a) Rs.10,970 overdrawn (b) Rs.12,200 overdrawn
(c) Rs.12,090 overdrawn (d) Rs.11,550 overdrawn
Q.16 Balance as per bank statement of Asim was Rs.11,600 credit as on April 30, 2018 which was not in
agreement with the balance as per cash book.
On investigation the following items were detected:
• Cheques issued and paid by the bank for Rs.5,500 but recorded in the cash book as Rs.500
• Bank service charges not entered in the cash book Rs.420
• Outstanding lodgements Rs.1,300
• Bank has erroneously debited a cheque of Rs.900 to Asim actually the cheque was issued by
Asif.
• Unpresented cheques Rs.1,200

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What should be the balance as per cash book before adjustments?

Rs. __________
(a) Rs. 18,020 (b) Rs. 18,202
(c) Rs. 18,002 (d) Rs. 18,200
Q.17 Following information is available regarding cash at bank of a business:
• Cash at bank as per bank column of the cash book Rs.4,910
• Unpresented cheques Rs.630
• Cheques received & paid into the bank, but not yet entered on the bank statement Rs.460
• Credit transfers entered on the bank statement but not entered in the cash book Rs.340
What is Cash at bank as per bank statement?
Rs. ___________
(a) Rs. 5,240 (b) Rs. 5,420
(c) Rs. 2,540 (d) Rs. 5,424
Q.18 The bank column of a cash book showed a credit balance of Rs.8,000. There were unpresented cheques
amounting to Rs.2,500.
The bank statement showed bank charges, Rs.900, which were not recorded in the cash book.
What is the balance on the bank statement?
Rs. __________
(a) Rs. 6,400 (b) Rs. 6,500
(c) Rs. 4,600 (d) Rs. 6,300
Q.19 When preparing a bank reconciliation statement the following information is available.
• Balance as per cash book Rs.25,000 (Dr)
• Outstanding cheques Rs.1,500
• uncleared lodgements 1,300
• Standing order shown on the bank statement (not appearing in a cash book) Rs.200
• Dividend directly deposited in the bank (not appearing in the cash book) Rs.25
What is the balance as per bank statement?
Rs. ___________
(a) Rs.25,025 (b) Rs.20,250
(c) Rs. 25,250 (d) Rs. 25,255
Q.20 Balance as per bank statement was Rs.1,000 in debit. Comparison of bank statement with cash book
revealed that cheques of Rs.3,200 paid in as per the cash book but not yet on the bank statement and
cheques of Rs.500 paid out but not yet appeared on the bank statement. In addition the bank statement
shows direct deposit of Rs.800 by a customer but it is not recorded in cash book.
What is the balance as per cash book after adjustments?
Rs. __________
(a) Rs. 1,707 (Dr.) (b) Rs. 1,707 (Cr.)
(c) Rs. 1,700 (Dr.) (d) Rs. 1,700 (Cr.)
Q.21 The main purpose of preparing a bank reconciliation statement is?
(a) To know the bank balance
(b) To know the balance of bank statement
(c) To correct the cash book
(d) To identify causes of difference between cash book and bank statement

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Q.22 Bank Reconciliation Statement is prepared by

(a) Bank (b) Accountant
(c) Customer (d) Auditors
Q.23 Bank reconciliation statement is
(a) Part of bank statement (b) Part of the cash book
(c) A separate statement (d) A sub-division of journal
Q.24 Favorable balance means?
(a) Credit balance in the cash book (b) Credit balance in Bank statement
(c) Debit balance in cash book (d) Both b and c
Q.25 Unfavorable balance means?
(a) Credit balance in the cash book (b) Credit balance in Bank statement
(c) Debit balance in cash book (d) Debit balance in petty cash book
Q.26 When cheque is not paid by the bank, it is called?
(a) Stale cheque (b) Dishonored cheque
(c) Bearer cheque (d) None of the above
Q.27 Which of the following would not affect bank reconciliation?
(a) Dishonored cheque (b) Bank interest
(c) Discount received (d) All of the above
Q.28 An amount of Rs.1,000 is debited twice in the bank statement. When overdraft as per the cash book is
the starting point?
(a) Rs.1,000 will be added (b) Rs.1,000 will be deducted
(c) Rs.2,000 will be deducted (d) Rs.2,000 will be added
Q.29 Bank sent debit advice of Rs. 50,000 to company being interest on overdraft. It was not entered in cash
book.
Identify the correct adjustment in cash book?
(a) Rs. 50,000 will be debited (b) Rs. 50,000 will be credited
(c) No adjustment (d) Rs. 100,000 will be subtracted
Q.30 A discount of Rs. 20,000 was given to a supplier/debtor on his prompt repayment of debt but the
cashier entered the gross amount in cash book.
What should be the adjustment in cash to work out the correct balance of cash book?
(a) Rs. 20,000 will be debited in cash book
(b) Rs. 20,000 will be credited in cash book
(c) Rs. 40,000 will be debited in cash book
(d) Rs. 40,000 will be credited in the cash book
Q.31 In the Bank reconciliation statement “Deposit in transit” is usually:
(a) Subtracted from bank balance
(b) Added to bank balance
(c) Added to Cash book balance
(d) Subtracted from cash book balance
Q.32 Interest credited to bank account
(a) Add to cash book balance (b) Deduct from cash book balance
(c) Add to bank balance (d) Deduct from bank balance
Q.33 Bank inadvertently charged your bank account for another company's bank fees
(a) Add to cash book balance (b) Deduct from cash book balance
(c) Add to bank balance (d) Deduct from bank balance

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Q.34 A company had a receipt of Rs.989,000 and correctly prepared its bank deposit slip for Rs.989,000.
However, the company recorded the receipt in its Cash account as Rs.998,000.
How is the difference of Rs.9,000 handled on the bank reconciliation?
(a) Add to cash book balance (b) Deduct from cash book balance
(c) Add to bank balance (d) Deduct from bank balance
Q.35 For reconciling bank balances, un-presented cheques should be:
(a) added to balance of bank statement and deducted from balance of cash book
(b) deducted from balance of bank statement or added to balance of cash book
(c) deducted from balance of bank statement and added to balance of cash book
(d) added to balance of bank statement or deducted from balance of cash book
Q.36 Determine the balance as per bank statement using the following information:
• Balance as per cash book Rs. 49,100
• Cheques received and deposited into the bank, but not yet credited in the bank statement Rs.
4,600
• Un-presented cheques Rs. 6,300
• Credit transfers appearing in the bank statement but not entered in the cash book Rs. 3,400
(a) Rs. 52,500 (b) Rs. 54,200
(c) Rs. 58,800 (d) Rs. 50,800
Q.37 Following information has been extracted from the records of Eden Garments (EG), as at 30 June 2016:
Balance as per bank statement (overdraft) Rs. 1,490,850
Outstanding cheques amount to Rs. 3,856,300 and include:
• a cheque of Rs. 50,000 issued to a supplier bearing an incorrect payee's name. The cheque was
returned and recorded on 15 July 2016.
• a cheque issued to a supplier for Rs. 85,000 (included in above amount correctly) was recorded
in bank book as Rs. 58,000.
• a cheque dated 20 December 2015 for Rs. 4,630 issued for repair of a car was misplaced. The
repair charges were paid in cash and the misplacement of the cheque was not recorded.
Assuming that cash book balance has been corrected and adjusted, what amount of bank balance shall
be reported in statement of �inancial position?
(a) Rs. 5,292,520 Overdraft (b) Rs. 2,310,820 Positive balance
(c) Rs. 5,347,150 Overdraft (d) Rs. 2,365,450 Positive balance
Q.38 Following information has been extracted from the records of Eden Garments (EG), as at 30 June 2016:
Balance as per bank statement (overdraft) Rs. 1,490,850
Un-cleared cheques amount to Rs. 6,460,000 and include:
• a cheque of Rs. 366,000 received from a customer was returned by the bank as amount in
words was not in conformity with the amount in �igures. The return was not recorded and the
cheque was sent to the customer for replacement.
• a cheque of Rs. 76,000 received from a customer in settlement of an invoice availing payment
discount of 5%. The collection was recorded by EG at gross amount of invoice.
Assuming that cash book balance has been corrected and adjusted, what amount of bank balance shall
be reported in statement of �inancial position?
(a) Rs. 7,584,850 Overdraft (b) Rs. 4,603,150 Positive balance
(c) Rs. 7,950,850 Overdraft (d) Rs. 4,969,150 Positive balance

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Q.39 Following information has been extracted from the records of Eden Garments (EG), as at 30 June 2016:
Balance as per bank statement (overdraft) Rs. 1,490,850
An unidenti�ied credit of Rs. 354,000 was appearing in the bank statement. It was found that a
customer had made an online transfer by 30 June 2016.
Following debit/credit advice dated 30 June 2016 were received from the bank on 5 July 2016:
• Bank charges amounting to Rs. 7,850. It has been noted that the bank had over charged EG by
Rs. 1,250.
• Dividend collected by the bank amounting to Rs. 50,000.
• Payment on EG’s standing instruction of an annual subscription for a magazine amounting to
Rs. 12,000.
Assuming that cash book balance has been corrected and adjusted, what amount of bank balance shall
be reported in statement of �inancial position?
(a) Rs. 1,489,600 Overdraft (b) Rs. 760,000 Positive balance
(c) Rs. 1,492,100 Overdraft (d) Rs. 803,030 Positive balance
Q.40 The bank statements showed that cheques for Rs. 70,000, Rs.90,000 and Rs.100,000 had not been
presented for payment and that lodgements totalling Rs.210,000 had not been cleared. The balance on
the bank statement at 30 June was Rs. 1,550,000.
What is balance as per cash book?
(a) Rs. 1,600,000 debit (b) Rs. 1,600,000 credit
(c) Rs. 1,500,000 debit (d) Rs. 1,500,000 credit
Q.41 The balance in Jabbar’s cash account at 30 June showed an asset of Rs.1,660,000 (unadjusted). His bank
statement showed an overdraft of Rs.450,000.
On reconciling the cash account he discovers the following:
• The debit side of the cash account had been undercast by Rs.200,000.
• A total on the receipts side of the cash account of Rs.2,475,000 had been brought forward as
Rs.4,275,000.
• A cheque received by Jabbar for Rs.220,000 had bounced. No entry was made in records by
Jabbar.
• Bank charges of Rs.184,000 had been omitted from the cash account.
• Un-presented cheques totalled Rs.520,000 and un-cleared lodgements Rs.626,000.
Determine the balance as per cash book as to be reported in statement of �inancial position?
(a) Rs. 344,000 in current assets (b) Rs. 344,000 in current liabilities
(c) Rs. 970,000 in current assets (d) Rs. 970,000 in current liabilities
Q.42 While reconciling the bank statement with the cash/bank book of ABC Textiles for the year ended
December 31, 2013, you noted the following:
Balance as per bank statement at December 31, 2013, overdrawn Rs. 806,436
Cheques drawn but not presented till December 31, 2013, Rs. 377,784
A time-barred cheque of Rs. 5,000 was replaced with a new cheque on December 30, 2013, and entered
in the cash/bank book without the previous cheque being cancelled / reversed. Both the cheques are
included in above unpresented cheques.
Assuming that cash book balance has been corrected and adjusted, what amount of bank balance shall
be reported in statement of �inancial position?
(a) Rs. 1,179,220 debit (b) Rs. 1,1792,20 credit
(c) Rs. 433,652 debit (d) Rs. 433,652 credit

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Q.43 While reconciling the bank statement with the cash/bank book of ABC Textiles for the year ended
December 31, 2013, you noted the following:
Balance as per bank statement at December 31, 2013, overdrawn Rs. 806,436
Cheques drawn but not presented till December 31, 2013, Rs. 377,784
The above unpresented cheques include a cheque of Rs. 25,000 issued to supplier that is time barred
as of January 3, 2014.
Assuming that cash book balance has been corrected and adjusted, what amount of bank balance shall
be reported in statement of �inancial position?
(a) Rs. 1,159,220 credit (b) Rs. 453,652 credit
(c) Rs. 428,652 credit (d) Rs. 1,184,220 credit
Q.44 While reconciling the bank statement with the cash/bank book of ABC Textiles for the year ended
December 31, 2013, you noted the following:
(i) A cheque for Rs. 125,000 drawn by the company to pay for a new item of plant had been
mistakenly entered in the cash/bank book as Rs. 12,500
(ii) A cheque issued of Rs. 13,200 by the company has been entered in the credit column of the
bank statement.
What would be appropriate action for above issues while reconciling the bank balance?
(a) Record Rs. 112,500 on receipt side, item (ii) has already been accounted for correctly.
(b) Record Rs. 112,500 on payment side, item (ii) has already been accounted for correctly.
(c) Record Rs. 112,500 on payment side, include adjustment of Rs. 13,200 in bank reconciliation
statement.
(d) Record Rs. 112,500 on payment side, include adjustment of Rs. 26,400 in bank reconciliation
statement.
Q.45 On 30 June 2015, the bank book and bank statement of Ranjha Enterprises (RE) re�lected overdraft but
with different amounts. On scrutinizing the record, it was discovered that cheques deposited in bank
in the last week of June 2015, amounting to Rs. 1,550,000 were wrongly credited in the bank book. Out
of these, cheques amounting to Rs. 1,050,000 were cleared by the bank in July 2015 whereas a cheque
of Rs. 500,000 deposited on 29 June 2015 was dishonoured by the bank on 2 July 2015.
What will be appropriate action to reconcile or adjust the above issue?
(a) Include Rs. 1,550,000 on receipt side of cash book and adjust uncredited cheques of Rs.
1,550,000 in bank reconciliation statement
(b) Include Rs. 3,100,000 on receipt side of cash book and adjust uncredited cheques of Rs.
1,550,000 in bank reconciliation statement
(c) Include Rs. 3,100,000 on receipt side of cash book and Rs. 500,000 on payment side of cash
book and adjust uncredited cheques of Rs. 1,550,000 in bank reconciliation statement
(d) Include Rs. 3,100,000 on receipt side of cash book and Rs. 500,000 on payment side of cash
book and adjust uncredited cheques of Rs. 1,050,000 in bank reconciliation statement
Q.46 On 30 June 2015, the bank book and bank statement of Ranjha Enterprises (RE) re�lected overdraft but
with different amounts. On scrutinizing the record, it was discovered that �inancial charges on bank
overdraft amounting to Rs. 750,000 were recorded in the bank statement. However, review by the
Accounts Of�icer indicated an error and RE recorded the correct amount of Rs. 510,000 in the bank
book. The error was corrected by the bank on 10 July 2015.
What will be appropriate action to reconcile or adjust the above issue?
(a) Record Rs. 510,000 bank charges on payment side of cash book
(b) Record reversal of bank charges of Rs. 240,000 on receipt side of cash book
(c) Include Rs. 240,000 as reconciling item in bank reconciliation statement due to error by bank
(d) Include Rs. 750,000 as reconciling item in bank reconciliation statement due to error by bank

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Q.47 On 30 June 2015, the bank book and bank statement of Ranjha Enterprises (RE) re�lected overdraft but
with different amounts. On scrutinizing the record, it was discovered that a cheque issued to a supplier
amounting to Rs. 4,005,000 was entered in the bank book as Rs. 4,050,000. However, the bank
erroneously recorded the amount as Rs. 4,500,000.
What will be appropriate action to reconcile or adjust the above issue?
(a) Include Rs. 45,000 on payment side of cash book and also include Rs. 495,000 as reconciling
item in the bank reconciliation statement
(b) Include Rs. 45,000 on receipt side of cash book and also include Rs. 45,000 as reconciling item
in the bank reconciliation statement
(c) Include Rs. 45,000 on receipt side of cash book and also include Rs. 495,000 as reconciling
item in the bank reconciliation statement
(d) Include Rs. 495,000 on payment side of cash book and also include Rs. 495,000 as reconciling
item in the bank reconciliation statement
Q.48 On 30 June 2015, the bank book and bank statement of Ranjha Enterprises (RE) re�lected overdraft but
with different amounts. On scrutinizing the record, it was discovered that a supplier was issued a
cheque of Rs. 125,000 in place of a time barred cheque on 25 June 2015 and was cleared on the next
day. However, the cancellation of time barred cheque was not recorded by RE.
What will be appropriate action to reconcile or adjust the above issue?
(a) Include Rs. 125,000 on receipt side of cash book and unpresented cheques in BRS shall be Rs.
Nil.
(b) Include Rs. 125,000 on payment side of cash book and unpresented cheques in BRS shall be
Rs. 125,000
(c) Include Rs. 250,000 on receipt side of cash book and unpresented cheques in BRS shall be Rs.
125,000
(d) Include Rs. 250,000 on payment side of cash book and unpresented cheques in BRS shall be
Rs. 125,000
Q.49 On 30 June 2015, the bank book and bank statement of Ranjha Enterprises (RE) re�lected overdraft but
with different amounts. On scrutinizing the record, it was discovered that a payment of Rs. 50,000
through cheque was recorded twice in the bank book.
What will be appropriate action to reconcile or adjust the above issue?
(a) Include Rs. 50,000 on receipt side of cash book
(b) Include Rs. 50,000 on payment side of cash book and inform the bank about double payment
and request for necessary correction in their record
(c) Include Rs. 100,000 on receipt side of cash book and inform the bank about double payment
and request for necessary correction in their record
(d) Include Rs. 100,000 on payment side of cash book
Q.50 The following information pertains to XYZ limited:
Rupees
Balance as per cash book (credit) 11,000
Balance as per bank statement (credit) 16,500
Unpresented cheques 42,500
only reconciling item left is some cheques left banked and not yet credited
The only reconciling item left is some cheques left banked and not yet credited bank statements.
What is the total of cheques banked and not yet credited?
Select the most appropriate answer:
(a) Rs 30,000 (b) Rs 15,000
(c) Rs. 4,000 (d) Rs 41,000

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Q.51 Cheques issued but not credited, cause the bank statement balance to be the cash book balance.
(a) greater than (b) less than
(c) equal to (d) the two statements are irrelevant
Q.52 A supplier sends you a statement showing a balance outstanding of Rs.14,350. Your own records show
a balance outstanding of Rs.14,500. The reason for this difference could be that
(a) The supplier sent an invoice for Rs.150 which you have not yet received
(b) The supplier has allowed you Rs.150 cash discount which you had omitted to enter in your
ledgers
(c) You have paid the supplier Rs.150 which he has not yet accounted for
(d) You have returned goods worth Rs.150 which the supplier has not yet accounted for
Q.53 Statement of comprehensive income is prepared for
(a) Last day of accounting year (b) For whole year
(c) First day of accounting year (d) None of the above
Q.54 On 30 June 2015, the bank book and bank statement of Ranjha Enterprises (RE) re�lected overdraft but
with different amounts. On scrutinizing the record, it was discovered that a payment of Rs. 50,000
through cheque was recorded twice in the bank book.
What will be appropriate action to reconcile or adjust the above issue?
(a) Include Rs. 50,000 on receipt side of cash book
(b) Include Rs. 50,000 on payment side of cash book and inform the bank about double payment
and request for necessary correction in their record
(c) Include Rs. 100,000 on receipt side of cash book and inform the bank about double payment
and request for necessary correction in their record
(d) Include Rs. 100,000 on payment side of cash book
Q.55 Balance as per bank statement of Asim was Rs.11,600 credit as on April 30, 2018, which was not in
agreement with the balance as per cash book.
On investigation the following items were detected:
• Cheques issued and paid by the bank for Rs.5,500 but recorded in the cash book as Rs.500
• Bank service charges not entered in the cash book Rs.420
• Outstanding lodgements Rs.1,300
• Bank has erroneously debited a cheque of Rs.900 to Asim actually the cheque was issued by
asif
• Unpresented cheques Rs.1,200
What should be the balance as per cash book before adjustments?
(a) Rs. 18,020 Debit (b) Rs. 18,020 Credit
(c) Rs. 12,600 Debit (d) Rs. 12,600 Credit
Q.56 Which of the following two statements is not correct with respect to BRS?
(a) Its just a reconciliation statement and no entry has been made for the items appearing in BRS.
(b) Error made by the business is incorporated in the BRS.
(c) Error made by the bank is incorporated in the BRS.
(d) In BRS, Balance as per cash book is always the starting point for reconciliation purposes.

H. M. UMER 10
CHAPTER-10 BANK RECONCILIATION STATEMENT (BRS)

MULTIPLE CHOICE QUESTIONS (MCQ’S)

ANSWERS
A.1 c Rs.46,800 Dr
Bal. as per bank statement 45,200
Less: unpresented cheques (11,500)
Add: uncredited cheques 13,100
Balance as per adjusted cash book 46,800
A.2 b Rs.5,000 receivable from business by the bank
A.3 d Rs.5,640 overdrawn
Balance as per bank statement (6,980)
Less: unpresented cheques (10,460)
Add: uncredited cheques 11,800
Balance as per adjusted cash book (5,640)
A.4 c Rs.9,580 Dr
Adjusted Cash Book
Rs. Rs.
Unadjusted Closing 10,200 Standing order
Dividend income 30 Debit side over stated
Debtor
Adjusted closing balance
10,230 10,230

A.5 b
Adjusted Cash Book
Rs. Rs.
Interest income (150 x 2) 300 Bank charges 30
Standing order 150

A.6 a Rs.35,000 Cash at bank

Uncleared lodgments are reconciling item so, cash book balance is not adjusted for those.
Balance to be reported in the statement of �inancial position is always be the balance as per
the adjusted cash book.
A.7 a Bank service charges
All other items belong to reconciliation statement
A.8 c Rs.11,400 Cr
Balance as per adjusted cash book 11,050
Add: unpresented cheques 1,550
Less: uncredited cheques (1,200)
Balance as per bank statement 11,400

H. M. UMER 11
CHAPTER-10 BANK RECONCILIATION STATEMENT (BRS)

Adjusted Cash Book

Rs. Rs.
Unadjusted Closing 11,000 Bank charges 50
Interest income 100 Adjusted closing 11,050
11,100 11,100

A.9 b Rs.5,100 Dr
Balance as per bank statement 7,400
Less: unpresented cheques (18,500)
Add: uncredited cheques 16,200
Balance as per adjusted cash book 5,100
A.10 b Rs.15,250 Dr
Adjusted Cash Book
Rs. Rs.
Unadjusted Closing 15,000 Bank charges 200
Debtor 1,500 x 2 3,000 Interest expense 150
Creditor 1,200 x 2 2,400
Adjusted closing balance 15,250
18,000 18,000

A.11 a Rs.3,700
Balance as per bank statement 4,000
Less: unpresented cheques (1,000)
Add: Amount not credited by bank 100
Add: uncredited cheques 600
Balance as per adjusted cash book 3,700
A.12 c Added in balance as per cash book
Errors in cash book are corrected into the balance as per adjusted cash book and under-
casting of receipt would have decreased balance of cash that needs to be increased now.
A.13 b Debit balance as per bank statement means bank over draft.
Debit balance as per bank statement means business is a debtor of bank, hence, bank
overdraft.
A.14 b Standing orders paid by the bank not yet entered in cash book.
Standing order and bank charges both are payments and would be deducted from cash book
balance.
A.15 c Rs.12,090 overdrawn
Balance as per adjusted cash book (10,620)
Add: Unpresented cheques 4,385
Add: Credited by bank 645
Less: uncredited cheques (6,500)
Balance as per bank statement (12,090)

H. M. UMER 12
CHAPTER-10 BANK RECONCILIATION STATEMENT (BRS)

Adjusted Cash Book

Rs. Rs.
Unadjusted closing balance 9,870
Bank charges 750
Adjusted closing balance 10,620
10,620 10,620

A.16 a Rs. 18,020

Adjusted Cash Book
Rs. Rs.
Unadjusted closing (Bal.) 18,020 9,870
10,620 Credit side understated 5,000
Bank charges 420
Adjusted closing (W-1) 12,600
18,020 18,020
Note: From W-1 we compute the value of adjusted closing balance. Then put the receipts on
the receipt side while payments on the credit side. By this way we �ind the un-adjusted balance
of cash book.
W-1
Balance as per bank statement 11,600
Less: unpresented cheques (1,200)
Add: uncredited cheques 1,300
Add: wrongly debited by bank 900
Balance as per adjusted cash book 12,600
A.17 b Rs. 5,420
Balance as per adjusted cash book (W-1) 5,250
Add: unpresented cheques 630
Less: uncredited cheques (460)
Balance as per bank statement 5,420
W-1
Adjusted Cash Book
Rs. Rs.
Unadjusted closing 4,910 9,870
340 Adjusted closing 5,250
5,250 5,250

H. M. UMER 13
CHAPTER-10 BANK RECONCILIATION STATEMENT (BRS)

A.18 a Rs. 6,400 Dr.

Balance as per adjusted cash book (W-1) (8,900)
Add: unpresented cheques 2,500
Less: uncredited cheques -
Balance as per bank statement (6,400)
W-1
Adjusted Cash Book
Rs. Rs.
Unadjusted closing 8,000
Adjusted closing 8,900 Bank charges 900
8,900 8,900

A.19 a Rs.25,025 Cr.

Balance as per adjusted cash book (Dr.) 24,825
Add: unpresented cheques 1,500
Less: uncredited cheques (1,300)
Balance as per bank statement (Cr.) 25,025
W-1
Adjusted Cash Book
Rs. Rs.
Unadjusted closing (bal.) 25,000
25 Standard order 200
Adjusted closing balance 24,825
25,025 25,025

A.20 d Rs. 1,700 positive balance

Balance as per bank statement (cr.) (1,000)
Less: unpresented cheques (500)
Add: uncredited cheques 3,200
Balance as per bank statement (dr.) 1,700
A.21 d The brs identi�ies and reconciles the differences between cash book balance and balance as
per bank statement.
A.22 b The brs is control tool for the business and business has to prepare itself and almost always
this responsibility is given to the accountant.
A.23 c A separate statement.
It is a separate statement to identify the difference in bank balances.

H. M. UMER 14
CHAPTER-10 BANK RECONCILIATION STATEMENT (BRS)

A.24 d, c Debit balance in the cash book, credit balance in the bank statement
A.25 a, d Credit balance in the cash book, debit balance in the bank statement
A.26 b Cheque is refused to be paid (dishonored) when suf�icient balance is not available in the
account.
A.27 d All of the above
A.28 a As the starting point is balance as per adjusted cash book and this deduction is not included in
cash book (as in cash book effect of this transaction is correctly taken just once on the credit
side), so should be added in the overdraft balance of cash book.
A.29 b Debited by bank means the amount will be credited in the cash book.
A.30 b Discount allowed is recorded on the credit side on cash book so, rs. 20,000 will be credited in
cash book.
A.31 b Means un-credited cheques and it will be added to the bank balance.
A.32 a Add to cash book balance (means bank has credited business bank account due to receipt of
interest income so credit entry of bank means debit entry in the cash book).
A.33 c Add to bank balance (incorrectly debited by the bank is always added
A.34 b Deduct from cash book balance
A.35 b Deducted from balance of bank statement
Deducted from balance of bank statement or added to balance of cash book
A.36 b Rs. 54,200
Balance as per adjusted cash book 52,500
Add: unpresented cheques 6,300
Less: uncredited cheques (4,600)
Balance as per bank statement 54,200
W-1
Adjusted Cash Book
Rs. Rs.
Unadjusted closing (bal.) 49,100
3,400 Adjusted closing balance 52,500
52,500 52,500

A.37 a Rs. 5,292,520 overdraft

Balance as per bank statement (1,490,850)
Less: unpresented cheques (3,801,670)
Balance as per adjusted cash book (5,292,520)
(W-1)
Unpresented cheques as per question 3,856,300
(50,000)
(4,630)
3,801,670
A.38 b Rs. 4,603,150 positive balance

H. M. UMER 15
CHAPTER-10 BANK RECONCILIATION STATEMENT (BRS)

Balance as per bank statement (1,490,850)

Add: uncredited cheques (6,460,000 – 366,000) 6,094,000
Balance as per adjusted cash book (4,603,150)
A.39 a Rs. 1,489,600 overdraft
Balance as per bank statement (1,490,850)
Add: wrongly debited by bank 1,250
Balance as per adjusted cash book (1,489,600)
A.40 c Rs. 1,500,000 Debit
Balance as per bank statement 1,550,000
Less: unpresented cheques (70,000 + 90,000 + 100,0000) 260,000
Add: uncredited cheques (210,000)
Balance as per adjusted cash book 1,500,000
A.41 b Rs. 344,000 in current liabilities
Adjusted Cash Book
Rs. Rs.
Unadjusted closing (bal.) 1,660,000 Debit side over casted 1,800,000
(4,275,000 – 2,475,000)
Debit side under cast 200,000 Debtor 220,000
Adjusted closing balance 344,000c Bank charges 184,000
2,204,000 2,204,000

A.42 b Rs. 1,179,220 credit

Balance as per bank statement (806,436)
Less: unpresented cheques (377,784 – 5,000) (372,784)
Less: uncredited cheques -
Balance as per adjusted cash book (1,179,220)
A.43 d Rs. 1,184,220 credit
Balance as per bank statement (806,436)
Less: unpresented cheques (377,784)
Balance as per adjusted cash book (1,184,220)
A.44 d Record Rs. 112,500 on payment side, include adjustment of Rs. 26,400 in bank reconciliation
statement.
A.45 d Include Rs. 3,100,000 on receipt side of cash book and Rs. 500,000 on payment side of cash
book and adjust uncredited cheques of Rs. 1,050,000 in bank reconciliation statement
A.46 c Include Rs. 240,000 as reconciling item in bank reconciliation statement due to error by bank
A.47 c Include Rs. 45,000 on receipt side of cash book and also include Rs. 495,000 as reconciling
item in the bank reconciliation statement

H. M. UMER 16
CHAPTER-10 BANK RECONCILIATION STATEMENT (BRS)

A.48 a Include Rs. 125,000 on receipt side of cash book and unpresented cheques in BRS shall be Rs.
nil.
A.49 a Include Rs. 50,000 on receipt side of cash book
There is no error in records maintained by bank.
A.50 b Rs 15,000
A.51 b In case of un-credited cheques, the balance of cash book is always greater than the balance of
bank statement and vice versa.
A.52 b The supplier has allowed you rs.150 cash discount which you had omitted to enter in your
ledgers
A.53 b For whole year
A.54 a Include Rs. 50,000 on receipt side of cash book
A.55 a RS. 18,020 Debit
A.56 b, d Error made by the business is incorporated in the BRS
In BRS, balance as per cash book is always the starting point for reconciliation purposes.

**********

H. M. UMER 17