Free Bank Reconciliation and Control Accounts MCQs with Answers
34 Bank Reconciliation and Control Accounts MCQs from Accounting, each with the correct answer and a written explanation of why it is correct. Free and unlimited, with no account needed.
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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- A. To compare cash sales with credit sales
- B. To explain differences between the cash book and bank statement
- C. To calculate the total profit earned by the business
- D. To record all transactions in the purchases journal
Explanation: A bank reconciliation statement explains why the bank balance in the cash book differs from the balance shown by the bank statement.
Correct answer: To explain differences between the cash book and bank statement- A. The bank statement balance is lower than the cash book balance
- B. Both balances are reduced by the same amount
- C. The cash book balance is lower than the bank statement balance
- D. Neither balance includes the cheque amount
Explanation: The business records the cheque in its cash book when it is issued, but the bank records it only when the cheque is presented.
Correct answer: The cash book balance is lower than the bank statement balance- A. The bank statement balance is higher than the cash book balance
- B. The cash book balance becomes a bank overdraft
- C. Both balances are increased immediately
- D. The cash book balance is higher than the bank statement balance
Explanation: The cash book records the deposit when the business receives it, while the bank statement records it after the bank processes it.
Correct answer: The cash book balance is higher than the bank statement balance- A. Credit the bank column and debit bank charges
- B. Debit the bank column and credit bank charges
- C. Debit the bank column and credit sales
- D. Credit the bank column and debit purchases
Explanation: Bank charges reduce the business bank balance and are an expense. The cash book therefore credits the bank column and debits the bank…
Correct answer: Credit the bank column and debit bank charges- A. Debit the bank column and credit the customer account
- B. Credit the bank column and debit the customer account
- C. Debit the bank column and credit the purchases account
- D. Credit the bank column and debit the sales account
Explanation: A direct deposit increases the bank balance and reduces the customer's receivable.
Correct answer: Debit the bank column and credit the customer account- A. To replace the need for a trial balance
- B. To summarize transactions recorded in a subsidiary ledger
- C. To record only cash transactions of the business
- D. To calculate the depreciation of fixed assets
Explanation: A control account summarizes the total entries from a subsidiary ledger, such as the sales ledger or purchases ledger.
Correct answer: To summarize transactions recorded in a subsidiary ledger- A. Credit sales
- B. Interest charged to customers
- C. Opening balance of trade receivables
- D. Sales returns
Explanation: Sales returns reduce the amount owed by customers, so they are credited to the sales ledger control account.
Correct answer: Sales returns- A. Discount received from suppliers
- B. Returns outward
- C. Credit purchases
- D. Closing balance of trade payables
Explanation: Discount received reduces the amount payable to suppliers, so it is entered on the debit side of the purchases ledger control account.
Correct answer: Discount received from suppliers- A. Rs. 97,000
- B. Rs. 107,000
- C. Rs. 117,000
- D. Rs. 127,000
Explanation: Closing receivables equal opening receivables plus credit sales less receipts, returns, discounts, and bad debts. The calculation is Rs.
Correct answer: Rs. 107,000- A. A credit sale recorded in both ledgers
- B. A cash receipt recorded in both ledgers
- C. A discount allowed recorded only in the control account
- D. A balance brought forward recorded in both ledgers
Explanation: If discount allowed is entered in the control account but omitted from the relevant customer account, the two totals will differ.
Correct answer: A discount allowed recorded only in the control account- A. Record Rs. 12,000 as a credit sale in the cash book
- B. Add Rs. 12,000 to the cash book balance and notify the bank
- C. Subtract Rs. 12,000 from the cash book balance as bank charges
- D. Add Rs. 12,000 to the bank statement balance and notify the bank
Explanation: The bank has reduced the statement balance incorrectly, so the amount is added back when reconciling the statement.
Correct answer: Add Rs. 12,000 to the bank statement balance and notify the bank- A. Rs. 28,000 favourable
- B. Rs. 22,000 favourable
- C. Rs. 18,000 favourable
- D. Rs. 36,000 favourable
Explanation: The bank balance is increased by unpresented cheques and reduced by deposits not yet credited. Therefore, Rs. 25,000 plus Rs.
Correct answer: Rs. 28,000 favourable- A. Rs. 10,000
- B. Rs. 20,000
- C. Rs. 16,000
- D. Rs. 26,000
Explanation: Starting with a cash book overdraft of Rs. 18,000, unpresented cheques reduce the overdraft by Rs.
Correct answer: Rs. 16,000- A. Debit bank and credit the customer
- B. Debit bank charges and credit sales
- C. Debit sales and credit the customer
- D. Debit the customer and credit bank
Explanation: Dishonour cancels the earlier receipt and restores the customer's liability.
Correct answer: Debit the customer and credit bank- A. Debit rent expense and credit bank
- B. Debit bank and credit rent expense
- 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.
Correct answer: Debit rent expense and credit bank- A. Subtract Rs. 3,600 from the cash book
- B. Add Rs. 3,600 to the cash book
- C. Add Rs. 4,800 to the bank statement
- D. Subtract Rs. 8,400 from the bank statement
Explanation: The receipt is understated in the cash book by Rs. 3,600, calculated as Rs. 8,400 minus Rs. 4,800.
Correct answer: Add Rs. 3,600 to the cash book- A. Debit sales ledger control and credit purchases ledger control
- B. Debit both control accounts
- C. Debit purchases ledger control and credit sales ledger control
- D. Credit both control accounts
Explanation: The set-off reduces both the receivable and the payable. Therefore, the sales ledger control account is credited and the purchases ledger…
Correct answer: Debit purchases ledger control and credit sales ledger control- A. Debit side
- B. It is excluded from the control account
- C. Both sides equally
- D. Credit side
Explanation: Writing off a bad debt reduces the amount due from customers, so it is credited to the sales ledger control account.
Correct answer: Credit side- A. Purchases day book
- B. Sales day book
- C. Cash book
- D. General journal
Explanation: Credit sales are first recorded in the sales day book, and its total is posted to the sales ledger control account.
Correct answer: Sales day book- A. No error exists anywhere in the sales ledger
- B. The bank reconciliation is automatically complete
- C. Only that the two recorded totals agree arithmetically
- D. The individual customer accounts are no longer required
Explanation: Agreement confirms that the two recorded totals are arithmetically consistent, but it does not prove that every transaction was recorded…
Correct answer: Only that the two recorded totals agree arithmeticallyBank Reconciliation and Control Accounts MCQs: common questions
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