Bank Reconciliation Statement — Account STD 11 Commerce — Question

A contra entry is one which does not require posting to the ledger.

Under diminishing balance method, depreciation is charged on the cost price of fixed asset.

Creation of reserves is discretionary.

Materiality principle is an exception to the ‘Full Disclosure Convention'.

Normally, if Cash Book shows a debit balance, Pass Book also shows a debit balance.

Pass Book and the Bank statement are one and the same thing, because both of them are the copy of customer's Ledger account maintained by bank.

Ledger is a book of original entry.

Depreciation is provided only on fixed assets except land.

“Provision" is a charge against profits.

No entry is passed in the books of the drawee when a bill is either discounted or endorsed.