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. Debit the bank reconciliation statement
- B. Credit the bank column of the cash book
- C. Debit the bank column of the cash book
- D. Credit the bank reconciliation statement
Explanation: Bank interest increases the business's bank balance, so the bank column of the cash book is debited.
Correct answer: Debit the bank column of the cash book- A. The recorded balance is understated by Rs. 3,000
- B. The bank statement balance is overstated by Rs. 3,000
- C. The bank statement balance is understated by Rs. 3,000
- D. The recorded balance is overstated by Rs. 3,000
Explanation: An overcast means the total has been added by too much, so the cash book bank balance is higher than it should be by Rs. 3,000.
Correct answer: The recorded balance is overstated by Rs. 3,000- A. A bank service charge omitted from the cash book
- B. A deposit recorded but not yet credited
- C. A cheque issued but not yet presented
- D. An error made by the bank in its statement
Explanation: Bank service charges are known from the bank statement but are initially missing from the cash book, so they are entered in the adjusted…
Correct answer: A bank service charge omitted from the cash book- 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.
Correct answer: Rs. 39,000 favourable- A. A standing order already entered in the cash book
- B. A bank charge already entered in the cash book
- C. A direct receipt already entered in the cash book
- D. A cheque issued but not yet presented
Explanation: An issued cheque not yet presented creates a timing difference between the cash book and bank statement.
Correct answer: A cheque issued but not yet presented- A. Interest charged to customers
- B. Returns inward from customers
- C. Discount allowed to customers
- D. Bad debts written off
Explanation: Interest charged to customers increases the amount receivable and is therefore debited to the sales ledger control account.
Correct answer: Interest charged to customers- A. Rs. 68,000 credit
- B. Rs. 92,000 credit
- C. Rs. 80,000 credit
- D. Rs. 104,000 credit
Explanation: The closing payable is Rs. 60,000 + Rs. 220,000 - Rs. 180,000 - Rs. 12,000 - Rs. 8,000 = Rs. 80,000.
Correct answer: Rs. 80,000 credit- A. The sales day book
- B. The journal proper
- C. The cash book
- D. The purchases day book
Explanation: The purchases day book records credit purchases of goods, and its total is posted to the debit side of the purchases ledger control…
Correct answer: The purchases day book- A. It provides an independent check on ledger records
- B. It removes the need for source documents
- C. It guarantees that no accounting error occurs
- D. It records only cash transactions in detail
Explanation: The control account total can be compared with the total of the individual subsidiary ledger balances, helping to identify errors or…
Correct answer: It provides an independent check on ledger records- A. The amount owed to suppliers
- B. The amount owed by customers
- C. The total cash held by the business
- D. The total value of goods returned
Explanation: A debit balance in the sales ledger control account normally represents trade receivables, meaning amounts owed by customers.
Correct answer: The amount owed by customers- A. Rs. 27,800 favourable
- B. Rs. 37,300 favourable
- C. Rs. 32,800 favourable
- D. Rs. 30,800 favourable
Explanation: The adjusted cash book balance is Rs. 34,300 after adding the direct credit and deducting bank charges. The bank statement balance is Rs.
Correct answer: Rs. 30,800 favourable- A. Reduce the cash book balance by the cheque amount
- B. Increase the cash book balance by the cheque amount
- C. Increase the bank statement balance by the cheque amount
- D. Record the cheque as a deposit in transit
Explanation: The duplicate entry has reduced the cash book balance twice, although the bank has reduced it only once.
Correct answer: Reduce the cash book balance by the cheque amount- A. An amount owed by the business to suppliers
- B. An amount owed by suppliers to the business
- C. The total value of credit purchases
- D. The total value of payments made to suppliers
Explanation: Suppliers' accounts normally have credit balances because the business owes them money.
Correct answer: An amount owed by suppliers to the business- A. Credit sales to customers
- B. Receipts from credit customers
- C. Cash sales made by the business
- D. Bad debts written off
Explanation: The sales ledger control account summarises transactions with credit customers whose individual accounts are kept in the sales ledger.
Correct answer: Cash sales made by the business