Tag: elements of book keeping and accountancy

Questions Related to elements of book keeping and accountancy

When businessman pays money to bank it is known as _________________.

elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

  1. withdrawal

  2. deposit

  3. expenses

  4. liability

Show answer
Correct Option: B
Explanation:

The bank is a keeper of our money and safeguards it also paying an interest.

If any money is paid to the bank which is not in a form of interest or penalty or any fees, it is a deposit which is payable by bank on demand.

Which of the following type of account can be opened with bank?

elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

  1. Current Account.

  2. Savings Account.

  3. Fixed Deposit Account.

  4. Any of the above.

Show answer
Correct Option: D
Explanation:

Depending upon the type of requirement a customer can open any of the given accounts with the bank.

Current Account is preferred by Business organisations; 
Savings Account is preferred by salaried people; 
FD Account is a form of investment instrument.
Percentage of interest fetched by these accounts will differ depending upon the type of account. 

A bank is an insitution which deals in ________.

elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

  1. goods

  2. money

  3. issue of currency

  4. none of the above

Show answer
Correct Option: B
Explanation:

A bank is an institution which deals in money. It facilitates the transactions of different types of business both small and large scale and even on an individual level. Even though banks deal in money still they are not empowered to issues currency. In India only the Reserve Bank of India (RBI) has the power to issue currency.

When businessman takes money from bank out of its account it is known as _________.

elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

  1. withdrawal

  2. deposit

  3. expenses

  4. liability

Show answer
Correct Option: A
Explanation:

The bank is a keeper of our money and safeguards it also paying an interest.

If any money is taken from the bank it is called 'withdrawal', which is the right of the account holder, to withdraw as per his wish within the limits as prescribed by the respective banks.

________ is a statement which is prepared as on a particular date to reconcile the bank balance as per cash book with balance as per pass book by showing all the causes of difference between the two. 

elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

  1. A bank statement

  2. A bank reconciliation statement

  3. Income Statement

  4. Position statement

Show answer
Correct Option: B
Explanation:

Whenever money is deposited in bank  or withdrawn from bank it is recorded in two places.

  • The pass book maintained by the bank
  • The cash book (bank column ) maintained by the account holder.
These two books are opposites of each other which means if one shows credit balance then the other would reflect a debit balance of the exact same amount. But due to reasons like timing differences the balances of both these books on a particular date do not match.
 Now, it is not practical and feasible for the bank to reconcile the account balances of each and every account holder so, the account holder prepares a bank reconciliation statement for his account maintained in the bank.

A bank reconciliation statement is a _________.

elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

  1. part of cash book

  2. part of financial statements

  3. part of pass book

  4. none of the above

Show answer
Correct Option: D
Explanation:

A Bank Reconciliation Statement is an independent statement prepared to reconcile the balance between the bank column of cash book and pass book.

It is neither a part of cash book nor pass book.
A Cash flow statement may be a part of financial statement but not Bank Reconciliation Statement.

A bank reconciliation statement is prepared by __________.

elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

  1. creditors

  2. debtors

  3. bank

  4. account holder

Show answer
Correct Option: D
Explanation:

Whenever money is deposited in bank  or withdrawn from bank it is recorded in two places.

  • The pass book maintained by the bank
  • The cash book (bank column ) maintained by the account holder.
These two books are opposites of each other which means if one shows credit balance then the other would reflect a debit balance of the exact same amount. But due to reasons like timing differences the balances of both these books do not match. 
Now, it is not practical and feasible for the bank to reconcile the account balances of each and every account holder so, the account holder prepares a bank reconciliation statement for his account maintained in the bank.

A bank reconciliation statement is a statement prepared to reconcile________.

elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

  1. cash balance as per cash book and bank balance as per pass book

  2. bank balance as per cash book and bank balance as per pass book

  3. both (A) & (B)

  4. none of the above

Show answer
Correct Option: B
Explanation:

Whenever money is deposited in bank  or withdrawn from bank it is recorded in two places.

  • The pass book maintained by the bank
  • The cash book (bank column ) maintained by the account holder.
These two books are opposites of each other which means if one shows credit balance then the other would reflect a debit balance of the exact same amount. But due to reasons like timing differences the balances of both these books do not match.
 Now, it is not practical and feasible for the bank to reconcile the account balances of each and every account holder so, the account holder prepares a bank reconciliation statement for his account maintained in the bank.

A bank reconciliation statement is prepared by _________.

elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

  1. the bank

  2. the bank account holder

  3. the government

  4. all of the above

Show answer
Correct Option: B
Explanation:

Whenever money is deposited in bank  or withdrawn from bank it is recorded in two places.

  • The pass book maintained by the bank
  • The cash book (bank column ) maintained by the account holder.
These two books are opposites of each other which means if one shows credit balance then the other would reflect a debit balance of the exact same amount. But due to reasons like timing differences the balances of both these books do not match. 
Now, it is not practical and feasible for the bank to reconcile the account balances of each and every account holder so, the account holder prepares a bank reconciliation statement for his account maintained in the bank.

A bank reconciliation statement can be prepared by ___________.

elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

  1. Partnership firm

  2. Sole proprietary concern

  3. Companies

  4. All fo the above

Show answer
Correct Option: D
Explanation:

Bank Reconciliation is a business exercise and not a compulsion by any act or rule. This reconciliation helps in knowing where is the business money going and how much is  in form of liquid cash and lying in the bank. If the balances does not tally there are possibilities of fraud or error.

Hence, be it Partnership firm, sole traders or corporate, they need to know the status of their money and bank reconciliation helps in determining it.