Case Study

Question 14 Marks

Sujan initiated her startup Ishika Ltd. in $2018$. On $31^{st}$ March$, 2022,$ She was going through her Cash book and Pass Book. She found out that the pass book showed a debit balance of $Rs.\ 7,500$ which was different from her cash book Bank column balance. So, she decided to prepare a Bank Reconciliation statement to reconcile both the balances from the following particula $Rs :$

Cheques paid in for collection amounted to $Rs. \ 20,600$ but cheques of $Rs.\ 7,800$ were credited on $3{rd}$ April$, 2022.$
A cheque for $Rs. \ 1,000$ debited in the cash book was omitted to be banked.
Cheques amounting to $Rs\ . 7,800$ were drawn on $27^{th}$ March, of which cheques of $Rs. \ 2,400$ were cashed upto $31^{st}$ march$, 2022.$
A cheque of $Rs.\ 800$ was banked and credited, but omitted to be recorded in the Cash Book.
Bank charged interest on overdraft $Rs, \ 650.$

Based on above information you are required to answer the following questions.
$1.$ How would you dealt with the bank interest charged by bank on overdraft?
$A.$ Plus $Rs\ . 650$
$B.$ Plus $Rs\ . 1,300$
$C.$ Not be recorded
$D.$ None of the above
$2.$ A cheque of $Rs\ . 800$ was banked and credited, but omitted to be recorded in the Cash Book. in Bank Reconciliation Statement, Sujan should:
$A.$ Ignore it
$B.$ Record it as minus $Rs\ .800$
$C.$ Record it as plus $Rs\ . 800$
$D.$ Either $A$ or $C$
$3.$ A cheque for $Rs\ . 1,000$ debited in the cash book was omitted to be banked. This error had not affected the balances so it should be ignored$-$ says Sujan. Sujan is
$A.$ Right
$B.$ No she is wrong, she should minus it from passbook balance
$C.$ No she is wrong, she should plus it in passbook balance
$D.$ Cannot be determined
$4.$ Cheques amounting to $Rs\ . 7,800$ were drawn on $27^{th}$ March, of which cheques of $Rs\ . 2,400$ were cashed upto $31^{st}$ march$, 2022$. This transaction should be recorded as $-$
$A.$ Minus $Rs\ . 7,800$
$B.$ Minus $Rs\ . 2,400$
$C.$ Minus $Rs\ . 5,400$
$D.$ Minus $Rs\ . 10,200$

Answer

$(i) \ A \ (ii)\ B \ (iii) \ C \ (iv)\ C$

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Question 24 Marks

After completing his $12^{th}$ class with commerce stream, Raman started to assist his father in their family business named, Raman Sons.. One day while going through the Cash Book of Raman Sons, he found that the cash book showed a balance of $Rs. 2,500$ at Bank as on $31^{st}$ December, $2021.$ He recalled the topic of Bank reconciliation statement studied by him during his $11^{th}$ standard in Accountancy subject. Thus, he tried to tally the balance of Cash book with Pass book. He found out that there is some mismatch, so he enquired and found that they sent cheques amounting to $Rs. 13,500$ for collection before $31^{st}$ December, but it seems from Pass Book that cheques for $Rs. 8,500$ had been credited by this date. Similarly, they issued cheques for $Rs. 9,800$ in the month of December, but cheques for $Rs. 1,350$ were presented in January, $2022.$
The pass book also revealed that bank collected dividend on securities $Rs. 1,000$ as per standing instruction. Bank also charged $Rs. 210 $ as incidental charges. Both of these entries were not passed in the Cash Book. So, he tried to prepare a
Bank Reconciliation Statement to reconcile the balance of cash book with the balance of pass book.
$1.$ When Bank Reconciliation Statement is prepared with debit balance as per Cash Book, the Balance derived will be
$A.$ Credit Balance as per Pass Book
$B.$ Debit Balance as per Cash Book
$C.$ Debit Balance as per Pass Book
$D.$ Either $(A)$ or $(C)$
$2.$ In Bank Reconciliation Statement, Cheques issued but not presented for payment in December would amount to:
$A.$ Plus $Rs. 8,450$
$B.$ Minus $Rs. 1,350$
$C.$ Plus $Rs. 1,350$
$D.$ Minus$ Rs. 8,450$
$3.$ In Bank Reconciliation Statement, dividend collected by the bank on securities will be recorded as:
$A.$ Plus $Rs. 1,000$
$B.$ Minus $Rs. 1,000$
$C.$ Will not be recorded
$D.$ Both $A$ and $B$
$4.$ In Bank Reconciliation Statement, Cheques deposited but not yet cleared would be recorded as:
$A.$ Plus $Rs. 5,000$
$B.$ Minus $Rs. 5,000$
$C.$ Plus $Rs. 8,500$
$D.$ Minus $Rs. 8,500$

Answer

$(i) D (ii) C (iii) A (iv) B$

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