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Question
Explain why does money deposited into bank appear on the debit side of the cash book, but on the credit side of the bank statement?
Solution
- The assets will be entered on the debit side. The balance of deposits held by the bank is recorded.
- It denotes a favourable balance as per cash boor unfavourable balance as per the passbook.
On the debit side, receipts of cash and cheques are recorded. - Deposited cash into the bank decreases the amount of cash available and is, therefore, credited to the cash account (cash column of the cash book).
- But, it also increases the bank balance and is, therefore, debited to a bank account (bank column of the cash book).
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On which side is interest on bank deposit recorded in Pass Book?
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Select the most appropriate alternative from those given and rewrite the following statement:
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From the following particulars prepare the Bank Reconciliation Statement as on 30th June 2019.
- Credit balance as per Pass Book ₹ 20,000.
- A cheque for ₹ 3,500 was issued and paid by the bank, recorded in the Pass Book as ₹ 5,300.
- Cheque deposited ₹ 9,700 collected by the bank was not recorded in the Cash Book.
- The payment side of Cash Book was undercast by ₹ 100.
- The electricity bill paid by the bank ₹ 6,200 was recorded twice in the Pass Book.
From the following particulars prepare Bank Reconciliation Statement as on 30th June 2019.
- Credit balance as per Pass Book ₹ 20,000.
- A cheque for ₹ 3,500 was issued and paid by bank, recorded in Pass Book as ₹ 5,300.
- Cheque deposited ₹ 9,700 collected by bank was not recorded in Cash Book.
- Payment side of Cash Book was undercast by ₹ 100.
- Electricity bill paid by bank ₹ 6,200 was recorded twice in Pass Book.
