The bank statement shows a favourable balance of Rs. 42,000. Cheques issued but not presented total Rs. 6,000, while deposits recorded in the cash book but not yet credited total Rs. 9,000. What is the cash book balance?
Correct answer: B. Rs. 39,000 favourable
- A. Rs. 27,000 favourable
- B. Rs. 39,000 favourable
- C. Rs. 45,000 favourable
- D. Rs. 57,000 favourable
Explanation
Starting with the bank statement balance, add unpresented cheques and subtract deposits not yet credited: Rs. 42,000 + Rs. 6,000 - Rs. 9,000 = Rs. 39,000. These timing differences explain why the two balances differ.
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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.
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