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Bank reconciliation statement is a statement prepared on a particular day to reconcile the bank balance as per Cash book
with the balance as per bank pass book, showing entries causing difference between the two balances.
2) What is A Prepaid Expense?
Prepaid expenses are those expenses which have been paid in advance and related benefits are not consumed within the
accounting period. The benefits of expenses incurred are carried to the next accounting period. Examples include prepaid
salary, prepaid rent etc. Prepaid expenses are recorded in the books at the end of an accounting period to show true
numbers of a business.
6) What is Capital Expenditure?
Capital expenditure, or CapEx, are funds used by a company to acquire or upgrade physical assets such as property,
industrial buildings or equipment. It is often used to undertake new projects or investments by the firm.
7) How to Reverse Wrong Entry? 8) What is Capital Revenue?
Sale of any fixed asset reduces fixed assets hence, the amount received is notrevenue earned in the normal course of
business. In fact, capital receipts do not affect the profit or loss of the business. They either increase the liabilities or
reduce the assets.
9) What are Control Ledgers? What are the purposes of Maintaining It?
In a business, sometimes it is not feasible to carry accounts of all the suppliers and customers
in the main ledger. In such cases apart from General or main ledger, the control ledgers are
maintained. Control ledgers records the individual accounts. In the end of the period, balance
shown in the main ledger has to tally with the balance in the individual ledger accounts
maintained in the control ledger. Purposes of maintaining control ledgers are:
- Sundry Debtors
- Sundry Creditors
- Advances to Staff
10) What is trial Balance? What does an Accurate Trial Balance Suggest?
Trial Balance is a list of closing balances of ledger accounts on a certain date and is the first
step towards the preparation of financial statements. It is usually prepared at the end of an
accounting period to assist in the drafting of financial statements.
11) What are the reasons which cause pass book of the bank and your bank book not tally?
What are the reasons which cause pass book of the bank
and your bank book not tally?
* Cheques deposited into the bank but not yet collected
* Cheques issued but not yet presented for payment
* Bank charges
* Amount collected by bank on standing instructions of the concern.
* Amount paid by the bank on standing instructions of the concern.
it is excluded expenditure
the 12-month rule applies, or
it relates to a pre-Review of Business Taxation (RBT) obligation.