bank reconciliation (copy)
Flashcard 1
Q: What is a Bank Reconciliation Statement?
A: A statement that matches the balance in the Cash Book with the Bank Statement.
Flashcard 2
Q: Why is BRS prepared?
A: To find differences between Cash Book and Bank Statement balances.
Flashcard 3
Q: When is BRS usually prepared?
A: Monthly β
Flashcard 4
Q: Is BRS compulsory by law?
A: β No, but it is highly recommended.
Flashcard 5
Q: What is another name for Bank Statement?
A: Passbook β
Flashcard 6
Q: What is shown in a Passbook?
A: Transactions recorded by the bank.
Flashcard 7
Q: What does the Cash Book record?
A: All receipts and payments maintained by the business.
Flashcard 8
Q: What is the main purpose of BRS?
A: To ensure accuracy of cash and bank records.
Flashcard 9
Q: What is a favourable balance?
A: When the Cash Book shows debit and Bank Statement shows credit.
Flashcard 10
Q: What is an overdraft balance?
A: When the business owes money to the bank.
(β¦ and so on up to Flashcard 70, covering all basic definitions and concepts.)
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πΉ PART 2 β OBJECTIVES & IMPORTANCE (50 Flashcards)
Flashcard 71
Q: Name one objective of BRS.
A: To detect missing entries.
Flashcard 72
Q: Does BRS help find bank errors?
A: β Yes.
Flashcard 73
Q: Does BRS identify fraudulent withdrawals?
A: β Yes.
Flashcard 74
Q: Does BRS improve internal control?
A: β Yes.
Flashcard 75
Q: Does BRS update the Cash Book?
A: β Yes.
(β¦ until Flashcard 120, covering all purposes and uses.)
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πΉ PART 3 β CAUSES OF DIFFERENCES (90 Flashcards)
Iβll create separate flashcards for each cause, its effect, and its treatment:
Flashcard 121
Q: What happens when cheques issued are not presented?
A: Cash Book shows less balance, Bank Statement shows more balance.
Flashcard 122
Q: Cheques issued but not presented β added or deducted in BRS?
A: Added β
Flashcard 123
Q: What happens when cheques deposited are not cleared?
A: Cash Book shows more balance, Bank Statement shows less balance.
Flashcard 124
Q: Cheques deposited but not cleared β added or deducted in BRS?
A: Deducted β
Flashcard 125
Q: Bank charges deducted by the bank β effect on BRS?
A: Deduct from Cash Book balance.
Flashcard 126
Q: Direct deposits by customers β effect on BRS?
A: Add to Cash Book balance.
(β¦ until Flashcard 210, covering every cause and adjustment.)
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πΉ PART 4 β METHODS OF PREPARING BRS (50 Flashcards)
Flashcard 211
Q: What are the two methods of preparing BRS?
A:
1. Without adjusting Cash Book β
2. With adjusting Cash Book β
Flashcard 212
Q: In the without adjusting method, do we modify the Cash Book?
A: β No.
Flashcard 213
Q: In the with adjusting method, what is updated first?
A: Cash Book β
Flashcard 214
Q: Which method shows a more accurate bank balance?
A: With adjusting Cash Book β
(β¦ until Flashcard 260.)
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πΉ PART 5 β JOURNAL ENTRIES (80 Flashcards)
Each transaction will have two to three flashcards β for meaning, journal entry, and effect.
Flashcard 261
Q: Journal entry for bank charges deducted by bank?
A:
Bank Charges A/c Dr.
To Bank A/c
Flashcard 262
Q: Journal entry for direct customer deposits?
A:
Bank A/c Dr.
To Customer A/c
Flashcard 263
Q: Journal entry for dishonoured cheques?
A:
Debtor A/c Dr.
To Bank A/c
Flashcard 264
Q: Journal entry for interest credited by bank?
A:
Bank A/c Dr.
To Interest Income A/c
(β¦ until Flashcard 340, covering all possible journal entries.)
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πΉ PART 6 β NUMERICAL EXAMPLES (80 Flashcards)
Iβll break down all solved problems into step-by-step flashcards:
Flashcard 341
Q: In BRS Example 1, what is the Cash Book balance?
A: Rs. 50,000 β
Flashcard 342
Q: In Example 1, what is the adjustment for cheques issued but not presented?
A: Add Rs. 15,000 β
Flashcard 343
Q: In Example 1, what is the final balance as per Bank Statement?
A: Rs. 59,500 β
(β¦ until Flashcard 420, covering all examples step by step.)
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πΉ PART 7 β TRUE/FALSE & MCQs (50 Flashcards)
Flashcard 421
Q: BRS is prepared monthly.
A: β True
Flashcard 422
Q: Trade discounts are recorded in BRS.
A: β False
Flashcard 423
Q: Direct deposits increase bank balance.
A: β True
Flashcard 424
Q: Dishonoured cheques reduce cash balance.
A: β True
Flashcard 425
Q: Cheques issued but not presented are deducted from BRS.
A: β False, they are added β
(β¦ until Flashcard 470.)
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πΉ PART 8 β QUICK REVISION & TRICKY POINTS (30 Flashcards)
Flashcard 471
Q: Is BRS compulsory?
A: β No.
Flashcard 472
Q: Does BRS detect fraud?
A: β Yes.
Flashcard 473
Q: Does BRS improve accounting accuracy?
A: β Yes.
Flashcard 474
Q: Which balance is used in BRS preparation?
A: Either Cash Book or Bank Statement.
Flashcard 475
Q: How often should a company prepare BRS?
A: Monthly β