Business Studies Class 11 Chapter 3 Question Answers
Businesses need to keep a thorough track of cash and bank transactions. The cash and bank account are recorded and balanced regularly in the cash book. Once the bank column in the cash book is balanced, it must be matched with the bank transactions recorded in the passbook. The amount of the bank column in the cash book and the balance must tally. But in reality, there might exist some differences in the balances.
Chapter 5 in Class 11 Accountancy deals with the Bank Reconciliation Statement, which helps to tally the balances of the bank column of the cash book and the bank statement. The differences are identified and then reflected in the Bank Reconciliation Statement.
Students should start studying Chapter 5 from the NCERT books, after which they can refer to the Important Questions Class 11 Accountancy Chapter 5 from the Extramarks’ website. So by understanding concepts from the textbook and practising essential questions, students can strengthen their knowledge and understanding of the chapter.
Lakhs of students across the country use Extramarks as one of the best online study companions. We here at Extramarks provide students with a list of essential questions while keeping the latest CBSE guidelines in mind. The team of experts refer to NCERT books, other reference books, CBSE past years’ papers, CBSE sample papers, etc., while making a comprehensive list of questions for an all-rounded study session for students. Solving Important Questions Class 11 Accountancy Chapter 5 students will be able to confidently face all the questions in their examination and score good grades.
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Bank Reconciliation Statement Class 11 Extra Questions with Solutions
Practice is a must when studying for class or practising for examinations in Accountancy. Students can use the Important Questions Class 11 Accountancy Chapter 5 as a practice tool that will help them develop confidence and excel in the subject of Accountancy.
Below are some of the Class 11 Accountancy Chapter 5 Important Questions:
Question 1. A bank reconciliation statement is prepared by?
- Banker
- Accountant of the business
- Auditors
- Registrar
Answer 1: b) Accountant of the business
Explanation: The bank reconciliation statement is taken care of by the main Accountant of the business
Question 2. What is the main purpose of preparing a bank reconciliation statement?
- To know the bank balance
- To know the balance of the bank statement
- To correct the cash book
- To identify causes of difference between cash book and bank statement
Answer 2: d) To identify causes of difference between cash book and bank statement
Explanation: Bank Reconciliation Statement is prepared as there exist differences in the balance of the bank column of the cash book and the bank passbook balance given by the bank. These differences can be caused mainly by timing differences and recording errors.
Question 3. The difference in the balance of the cash book and bank passbook is caused due to _________.
Answer 3: Time Gap
Question 4. What is a bank overdraft?
Answer 4: A bank overdraft is when the withdrawal exceeds the available balance in the bank account. It is an obligation to be paid to the bank by the account holder.
Question 5. Prepare the proforma of the bank reconciliation statement.
Answer 5: The proforma of bank reconciliation statement:
|
Particulars |
Amount |
| Add :
Less: |
Balance as per the cash book
Cheques which are issued but not presented
Interest credited by the bank
Cheques deposited but yet not credited by the bank
Bank charges are not recorded in the cash book
Balance as per passbook |
|
Question 6. Explain the reasons why the balance shown by the bank passbook does not agree with the balance shown by the bank column of the cash book.
Answer 6: Mentioned below are some reasons because of why the balance shown by the bank passbook does not match with the balance shown by the bank column of the cash book
- Timing Difference:
- Cheques issued by the business but not presented for payment:
Some cheques the company issues to its suppliers or debtors are instantly entered on the cash book credit side. When the recipient submits it to the bank, though, there will be a lapse in time. Thus, the bank is unable to deduct the money. The balance between the two books will change as a result.
- Cheques deposited into the bank but yet not collected:
Cheques from clients or debtors are received by a business and promptly recorded on the debit side of the cashbook. When the checks are deposited into the bank, the bank does not immediately credit the company’s account; instead, it waits until the cheques are cashed. It causes a difference in the balance.
- Direct debits made by the bank on standing order of the firm:
The bank deducts various charges such as cheque collection charges, interest on an overdraft, and check bounce charges; the firm would be unaware of these deductions, and hence these changes are not represented in the firm’s cash book. The cashbook and passbook won’t be in sync as a result.
- Amounts directly deposited in the bank account:
When creditors or customers deposit money directly into the firm’s bank account, the firm is not notified. These entries won’t be added to the cash book as a result. Additionally, this will cause an imbalance between the cashbook of the company and the bank passbook.
- Interest and dividends collected by the bank:
On behalf of the company, the bank collects dividends and interest. Since the company won’t know about such credits, its cash book won’t be updated. The bank passbook and the company’s cash book are thus out of balance.
- Direct payments or debits made by the bank on behalf of customers:
When the company give the bank standing instructions to make payments to third parties such as telephone bills, insurance premiums, rent taxes, and so on, the firm is unaware of these payments, and such transactions are not shown in the firm’s cash book. It is a source of imbalance.
- Cheques deposited and bills dishonoured:
Suppose a cheque deposited by the firm is dishonoured, or a bill of exchange written by the business firm and discounted with the bank is dishonoured on the maturity date. In that case, the bank debits the customer’s account. The firm does not have access to this data immediately, and it won’t be entered into the cash book either. This will also result in an imbalance between the bank’s passbook and the firm’s cash book.
- Differences due to recording errors:
- Errors in recording transactions by the firm:
When the company makes mistakes in the cashbook when totalling transactions, writing checks, depositing checks, etc., it will cause an imbalance between the bank’s passbook and the firm’s cash book.
- Errors committed while recording transactions by the bank:
When the bank records incorrect transactions in the passbook, such as cheques issued, totals, cheques deposited, etc., it will cause an imbalance between the bank passbook and the cashbook of the company.
Question 7. Prepare a bank reconciliation statement from the following information as of March 31, 2017.
(i) Balance as per cash book is Rs. 3,200
(ii) Cheque issued but yet not presented for payment is Rs. 1,800
(iii) Cheque deposited yet not collected up till March 31 2017, amounts to Rs. 2,000
(iv) Bank charges are debited by the bank Rs. 150
Answer 7:
| Bank Reconciliation Statement, as on March 31, 2017 |
| S. No. |
Particulars |
(+)
Amount
₹ |
(–)
Amount
₹ |
|
Balance as per the Cash Book |
3,200 |
|
| (i) |
Cheque issued but not presented for payment |
1,800 |
|
| (ii) |
Cheque deposited but not cleared |
|
2,000 |
| (iii) |
Bank charges |
|
150 |
|
|
|
|
|
Balance as per the Pass Book |
|
2,850 |
|
|
5,000 |
5,000 |
Question 8.
(1) Overdraft observed as per Cash Book was Rs. 10,500 on June 30 2011.
(2) Cheques deposited but not collected Rs. 2,000.
(3) Cheques issued yet not presented for payment of Rs. 2,800.
(4) The bank charges Rs. 50 and interest on an overdraft of Rs. 250.
(5) A customer directly deposited Rs. 1,200 into the bank.
(6) Insurance Premium of Rs. 1,500 is paid by the bank as per standing instructions.
Prepare Bank Reconciliation Statement for the month of June 2011.
Answer 8:
| Particulars |
(+) Amount
₹ |
(-)
Amount
₹ |
| (1) Overdraft as per Cash Book |
– |
10,500 |
| (2) Cheques deposited but not yet collected |
– |
2,000 |
| (3) Cheques issued by the company but not yet presented at the bank for payment |
2,800 |
– |
| (4) (a) Bank Charges
(b) Interest on overdraft charged by the bank |
–
– |
50
250 |
| (5) Amount directly deposited by a customer in the bank |
1,200 |
– |
| (6) Insurance Premium paid by the bank not entered in Cash Book |
– |
1,500 |
| Total |
4,000 |
14,300 |
| Overdraft as Pass Book (14,300- 4,000) |
– |
10,300 |
Question 9. On comparing the cash book and passbook of Naman, it is found that on March 31 2017, the bank balance was ₹ 40,960 in the cash book, which differs from the bank balance in the following ways :
(a) Bank charged Rs. 100 on March 31 2017, which is not recorded in the bank column of the cash book.
(b) A debtor, on March 21 2017, paid Rs. 2,000 into the company’s bank to settle his account, but no entry was made in the company’s cash book.
(c) Cheques totalling Rs. 12,980 were issued and recorded in the cash book of the company before March 31 2017, but the same was not presented in the bank for payment until after that date.
(d) A bill of Rs. 6,900 discounted with the bank is duly entered in the cash book. The discount charge recorded is Rs. 800.
(e) Direct deposit of Rs. 3,520 is entered in the cash book as it was paid into the bank on March 31 2017, but it is not credited by the bank until the next day.
(f) No entry has been passed in the cash book for recording the dishonour on March 15 2017, of a cheque amounting to Rs. 650 received from Bhanu.
Prepare bank reconciliation statement as of March 31, 2017.
Answer 9:
| Bank Reconciliation Statement of Naman as on March 31, 2017 |
| S. No. |
Particulars |
(+)
Amount
₹ |
(-)
Amount
₹ |
|
Balance as per the Cash Book |
40,960 |
|
| (a) |
Bank debited charges |
|
100 |
| (b) |
Amount directly paid by debtor into bank account |
2,000 |
|
| (c) |
Cheques issued but not presented for payment |
12,980 |
|
| (d) |
Discount charges of bill were not recorded in the Cash Book |
|
800 |
| (e) |
Amount debited in the bank column of the Cash Book but not deposited in the bank. |
|
3,520 |
| (f) |
Cheque dishonoured but omitted to be recorded in the Cash Book |
|
650 |
|
|
|
|
|
Balance as per the Pass Book |
|
50,870 |
|
|
55,940 |
55,940 |
Question 10. On March 31 2019, the bank column of the cash book of Namrata & Co. showed a credit balance of Rs. 1,17,100 (Overdraft). Prepare bank reconciliation statement as of March 31 2018, from the following cash and bank statement particulars:
- Payment received directly by the bank from a customer amounting to Rs. 28,500, but no entry was passed in the cash book.
- Cheques recorded in the cash book but not sent to the bank for collection amounting to Rs. 13,400.
- Cheques issued for Rs. 1,80,400 but not yet presented for payment. The interest of Rs. 8,800 is charged by the bank and was not entered in the cash book.
Prepare a bank reconciliation statement.
Answer 10: In the Books of Namrata & Co
Bank reconciliation statement as on March 31, 2018
| S.No. |
Particular |
Dr. Amt (+) |
Cr. Amt (-) |
|
Overdraft as per cash book |
|
1,17,100 |
|
Cheques are recorded in cash book but not sent to the bank for collection |
|
13,400 |
|
Interest on bank overdraft debited by the bank but not entered in the cash book |
|
8,200 |
|
Payment received from the customer directly |
28,500 |
|
|
Credit in the bank A/c but not entered in the cash book |
1,80,400 |
|
|
Cheque issued but not presented for payment |
|
7,000 |
|
Balance as per the passbook (b/f) |
|
63,200 |
|
|
2,08,900 |
2,08,900 |
Benefits of Solving BRS Important Questions Class 11
A thorough understanding of Chapter 5, the Bank Reconciliation Statement, is necessary as it will become important to understand why in real scenarios, bank and cash book balances of businesses often do not match and how they are rectified. With a clear understanding of crucial concepts and proper practice of sums with the help of Important Questions Class 11 Accountancy Chapter 5 provided by Extramarks, students will be able to score well in their examinations.
Here is a list of benefits that students will get by solving BRS Class 11 Important Questions:
- The questions are created keeping the latest CBSE syllabus in mind, so students can rely on the important questions lists.
- The Accountancy Class 11 Chapter 5 Important Questions give the students an idea of how questions might come in examinations and help them stay prepared to give their best.
- These questions will enable students to revise the chapter thoroughly as the questions are covered from all over the chapter.
- The solutions to the questions are prepared by subject experts in a step-by-step format, which can help the students comprehend the topics more easily, so by practising Important Questions Class 11 Accountancy Chapter 5, students can be well prepared for the examinations.
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