Book Keeping & Accountancy State whether the following statements are true or false with reasons

This statement is True.
A bank statement is a statement issued by the bank to the current account holder informing about the bank transactions during a particular period of time. Generally, it is issued every i.e. month. It gives details information about bank deposits and withdrawals etc.

This statement is True.
Bank overdraft as per cash book means negative bank balance. The businessman has to pay the Bank. Bank charges are expenses for the business and this increases the amount payable to the bank so bank charges debited in the passbook only are to be added in the cash book.

This statement is False.
The businessman can prepare a Bank Reconciliation statement with the help of a cash book, bank column, and passbook. It is a comparison between the two to correct the differences. Both i.e. cash book and pass book/Bank statement are required to prepare a Bank Reconciliation statement.

This statement is True.
The credit side of the passbook means deposits made in the bank account. When direct deposits are made by debtors into a businessman’s bank account. It increases the bank balance and it is recorded on the credit side of Pass Book.

This statement is False.
Cheques deposited into the bank but not yet cleared appears in the cash book only. Bank records entry in the passbook only after the cheque is cleared. So there is no entry for this transaction in the Pass Book.

This statement is True.
The Debit side of the passbook represents payments. So any payments made by the bank, Bank debits the customer’s account and records on the Debit side of the passbook.

This statement is True.
The Debit side of the cash book means deposits. So cheque deposited into the Bank increases the Bank Balance as per Cash Book.

This statement is False.
Overdraft as per Cash Book means credit balance as per cash book. Cashbook debit means deposits. When cash book debit balance is greater it means Bank Balance as per Cash Book.

This statement is True.
A businessman maintains a cash book with a bank column to record his bank transactions whereas the bank also maintains a customer’s ledger account and issues him a Bank statement. There could be differences as per the bank balance in the cash book and bank balance in the passbook. To detect the errors that take place in accounting Bank Reconciliation Statement is prepared.

This statement is True.
All incomes are shown on the credit side of the passbook. It is a deposit. So Interest Credited in Passbook is an income to the customer.

This statement is False.
Bank charges are expenses for the business. Expenses decrease the bank balance as per Pass Book. Bank charges debited by the bank decrease the bank balance as per Pass Book.

This statement is True.
Debit Column of a passbook means withdrawals from the bank, When withdrawals are more than deposits it means the excess amount is withdrawn from the bank. It is a temporary loan payable by the trader to the bank. So the debit balance of Pass Book represents overdraft.

This statement is False.
Overdraft facility is allowed only to business current A/c and not to Proprietor’s Personal A/c.

This statement is True.
Monthly preparation of Bank Reconciliation Statement assists in the regular monitoring of cash flows of a business and identification of accounting errors.

This statement is False.
A Bank Reconciliation statement shows the causes of disagreement between the balances shown by the bank passbook and the bank balance shown by the cash book, for a particular period of time generally a month. It is prepared by the trader as he has both the books to compare and find the differences.