A bank standing order pays the business's monthly rent, but the payment has not been entered in the cash book. Which entry is required?
Correct answer: B. Debit rent expense and credit bank
- A. Debit bank and credit rent expense
- B. Debit rent expense and credit bank
- C. Debit rent expense and credit sales
- D. Debit drawings and credit bank
Explanation
Rent is an expense, so it is debited, and the bank balance has decreased, so bank is credited. A standing order is treated like any other payment made through the bank.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Bank Reconciliation and Control Accounts
Bank reconciliation explains differences between the cash book and bank statement through unpresented cheques, outstanding deposits, bank charges, direct payments, credited amounts and recording errors. Control accounts summarise receivables and payables ledgers, and their balances are reconciled with individual accounts to locate discrepancies.
Practise Bank Reconciliation and Control Accounts
34 free Bank Reconciliation and Control Accounts MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Accounting questions like this
Accounting is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Bank Reconciliation and Control Accounts questions
A cheque received from a customer is dishonoured by the bank after it has been recorded as a receipt in the cash book. What entry is required?
The cash book shows a bank overdraft of Rs. 18,000. Unpresented cheques are Rs. 5,000 and deposits in transit are Rs. 3,000. What overdraft should appear on the bank statement?
The cash book shows a favourable bank balance of Rs. 25,000. Unpresented cheques total Rs. 7,000 and deposits in transit total Rs. 4,000. What balance should appear on the bank statement?
The bank has correctly recorded a cash receipt of Rs. 8,400, but the business entered only Rs. 4,800 in the cash book. What correction is needed?
A customer is also a supplier, and the amount receivable from that customer is set off against the amount payable to the same party. What entries are made in the control accounts?
A bad debt written off from a customer's account is recorded on which side of the sales ledger control account?