MCQ on Trial Balances and

Rectification
Trial Balance is ______.

A. Statement

B. Account

C. Book

D.None of these
Trial Balance is prepared with ______.

A. Balances

B. Journal

C. Entries

D.None of these
Which of the following will not affect the Trial balance?

A. Wrong Balancing of the Account

B. Wrong Totaling of the Account

C. Wrong posting of the Account

D.All of these
Suspense Account rectify those errors:-

A. Which effect the Trial Balance

B. Which do not effect the Trial Balance

C. Principle Error

D.Compensating Errors
In Trial Balance Discount received will have:-

A. Debit Balance

B. Credit Balance

C. Both A and B

D.None of these
A trial Balance is a

A. Final Account

B. List of Balances

C. Principle Account

D.None of these
If the purchase book is overcast then rectifying entry will be:-

A. Debit the Suspense Account

B. Credit purchase

C. Both A and B

D.None of these
In Trial balance if debit side exceeds, the difference is transferred to ___

side of suspense account.

A. Debit side

B. Credit side

C. Both A and B

D.None of these
An entry of Rs. 901 was debited to Ravinder’s account as Rs. 109. This will

be

A. Error of Principle

B. Error of Commission

C. Error of Omission

D.None of these
Stationery worth Rs. 50 used by the proprietor debited to office expenses

account. It is an ___

A. Error of Principle

B. Error of Commission

C. Error of Omission

D.None of these
Sale of Rs. 100,000 on cash basis not recorded is the ____.

A. Error of Principle

B. Error of Commission

C. Error of Omission

D.None of these
Wrong balancing of an account is:____.

A. Error of Principle

B. Error of Commission

C. Error of Omission

D.None of these
Repair to building have been debited to buildings account:____.

A. Error of Principle

B. Error of Commission

C. Error of Omission

D.None of these
Sales Return of Rs. 4000 from Vijay were wrongly entered in purchase book.

The rectification entry is ____.

A. Debit Sales Account by Rs. 8,000/-

B. Credit Purchase A/c by Rs. 8,000/-

C. Credit Vijay’s A/c Rs. 8,000 and Debit Sales A/c & Purchase A/c Rs. 4000/-

D.Debit Sales Return A/c Rs. 4,000/- and Credit Purchase A/c Rs. 4,000/-
Purchased goods from Gopal for Rs.3600 but was recorded in Gopal’s A/c

was Rs. 6,300. In the rectifying entry Gopal’s A/c will be debited with:-

A. Rs. 9,900

B. Rs. 2,700

C. Rs. 3,600

D.Rs. 6,300
Suspense Account of Trial Balance is shown in:-

A. Trading Account

B. Balance Sheet

C. Ledger A/c

D. Cash Book
Trial Balance is prepared at the end of ____

A. Financial Year

B. Accounting Year

C. Both I and II

D. None of the above

Compensating Error cause ___ in Trial Balance.

A. Addition

B. No difference

C. Reduction

D. None of the above

An entry of Rs. 320 has been debited in the books as Rs. 250. It is an error of

____.
A. Omission
B. Commission
C. Principle
D. Compensating
Salary paid to cashier but has been debited to his personal a/c

is error of ___
A. Omission
B. Commission
C. Principle
D. Compensating
Total of Purchase book under cast by Rs. 800. It is the error of ____.

A. Omission
B. Commission
C. Principle
D. Compensating
Rectify the following errors:
(i) Credit sales to Mohan 7,000 were not recorded.
(ii) Credit purchases from Rohan 9,000 were not recorded.
(iii) Goods returned to Rakesh 4,000 were not recorded.
(iv) Goods returned from Mahesh 1,000 were not recorded
Rectify the following errors:
(i) Credit sales to Mohan Rs. 7,000 were recorded as Rs. 700.
(ii) Credit purchases from Rohan Rs. 9,000 were recorded as Rs. 900.
(iii) Goods returned to Rakesh Rs. 4,000 were recorded as Rs. 400.
(iv) Goods returned from Mahesh Rs. 1,000 were recorded as Rs. 100.
Three Column Cash Book - Discount
 Petty Cash Book

• Petty cash book is the book which is used for the purpose of
recording expenses involving small amounts.
• It is like Petty Cash Account and is maintained by Petty
Cashier.
• Petty Cash Book may be of two types:-
• Ordinary System of Petty Cash
• Imprest System of Petty Cash
 Imprest System Petty Cash Book
• In this system, the petty cashier is entrusted with a specified amount at the
beginning of every month, fortnight or week.
• The cashier makes payment out of the amount granted to him. At the month end
the petty cashier, after making payments from the amount, gives the payment
voucher to the main cashier, who reimburses the amount to the petty cashier at
the end of the month.
• So, the petty cashier will have the same fixed amount at the beginning of the
next period.
 Bank Reconciliation statement
• Bank reconciliation( B. R. ) is based on the principle of double entry.
Credit the giver and debit the receiver

• It is not a part of Book-Keeping. It is only prepared if the difference is there.

• B. R. Shows causes of differences between cash book and pass book balance

• Debit balance as per cash book is credit balance as per pass book = positive
balance

• Credit balance in cash book is debit balance in pass book = negative

balance/overdraft
RECORDING TRANSATION IN CASH BOOK
TRANSACTION CONTAINED IN THE PASSBOOK/BANK STATEMENT

BANK ABC LTD------BRANCH

CURRENTN ACCOUNT OF XY AND CO.

DATE PARTICULAR DEBITS CREDITS BALANCE

1/1/14 B/F 300000

2/4/14 CASH DEPOSIT 10000 310000

6/4/14 SALARY 15000 295000

CHEQUE PAID

7/4/14 BY CLEARING 20000 315000

IS PASBOOK A MIRROR IMAGE OF CASH BOOK?

➢Passbook is a mirror image of the cash book only in the sense that
credit entries in cash book are reflected as debit entries in the
passbook and debit entries in cash book are reflected as credit entries
in the passbook.
Causes for passbook and cashbook being
different
1. Errors
2. Entries which do not require change in cashbook
(A) Cheques issued but not presented for payment
(B) Cheques Deposited into bank but not yet collected
3. Entries which require change in cashbook
(A) Bank charges
(B) Interest on saving bank
(C) Interest on overdraft
(D) Amount collected by bank on standing instruction
(E) Amount paid by bank on standing instruction
(F) Direct payments into the Bank made by trader’s
customers
(G) Dishonour of a cheque
Steps to reconciliation
1. Finding out entries which do not require change in cash book.
These entries gives us the ‘Adjusted bank balance’(these entries
are present in the cash book but not in the bank statement)
2. Finding out clerical mistakes in our cashbook and rectifying them.
3. Finding out entries which require change in our cashbook (these
entries are present in the statement but not in the cashbook)
PREPARING RECONCILIATION STATEMENT
ADVANTAGES OF BANK RECONCILIATION STATEMENT

1. It help the management to check the accuracy of the

entries made in the cash book.
2. It helps to detect errors and to take timely action for
the correction of balances.
3. It is very important control technique for the
management.
4. It shows the correct bank balance at any particular
time.
5. It reveals frauds committed by the staff handling
cash and cheque and thus, helps the management to
have effective control.
Example:→Given :
• The balance as per cash book is Rs. 7500.
• Cheque drawn but not presented Rs. 800
• Cheque paid into bank but not credited Rs. 200
• Bank Charges not entered in Cash Book Rs. 10
 Solution

Particulars Plus Minus

Balance as per Cash Book

Cheque drawn but not presented

Cheque paid into bank but not credited

Bank Charges

Balance as per Passbook

Total
Given :
• The balance as per cash book is Rs. 110,000
• Cheque drawn but not presented Rs. 25,000
• Cheque paid into bank but not credited Rs. 42,000
• A cheque directly deposited in bank Rs.5,000
• Interest paid on O/D – Rs. 4200
 Solution

Particulars Plus Minus

Balance as per Cash Book

Cheque drawn but not presented

Cheque paid into bank but not credited

A cheque directly deposited in bank

Interest paid on O/D

Balance as per Passbook

Total
State True or False:-
A. BRS can be prepared only with balance of Cash
Book.
B. The debit side of Cash book means credit side of
Pass book.
C. Cheque not yet presented are added in Cash book.
D.BRS is prepared by bank authorities.
E. The debit balance of Passbook means overdraft
Overdraft of Pass Book means:
A. Debit Balance
B. Credit Balance
C. Either a or b
D. Neither a nor b
 AFB-Paper 2 – JAIIB || DBF 2020

BRS is prepared by:

A. Customer
B. Bank
C. Tax Authority
D. Owner of business
 AFB-Paper 2 – JAIIB || DBF 2020

The causes of difference between Cash book and

Pass Book are shown by:
A. Subsidiary book
B. Cash book
C. Journal
D. BRS
 AFB-Paper 2 – JAIIB || DBF 2020

Which of the following is part of reconciliation?

A. Cash paid by customer to the trader
B. Cheque issued but not presented for payment
C. Bank charges debit only in Pass book
D. Both b and c of these
 AFB-Paper 2 – JAIIB || DBF 2020

The bank overdraft is Rs. 12,000/- as per pass

book. The company issued a cheque of Rs.
4,000/- which was not presented. The balance as
per cash book will be ____.
A. Rs. 16,000
B. Rs. 18,000
C. Rs. 20,000
D. Rs. 12,000
 AFB-Paper 2 – JAIIB || DBF 2020

The overdraft balance in a bank pass book is Rs.

10,200. Firm has issued a cheque of Rs. 4,800
which has not been presented so far for payment.
The balance as per cash book will be ____.
A. Rs. 15,000
B. Rs. 5,400
C. Rs. 10,200
D. Rs. 4,800
 AFB-Paper 2 – JAIIB || DBF 2020

The passbook of an account holder is the copy of

_____.
A. The bank columns in the cash book of the
account holder.
B. The cash columns in the cash book of a bank
C. The relevant account in the books of a bank
D. Data incomplete
 AFB-Paper 2 – JAIIB || DBF 2020
The overdraft balance in a bank pass book is Rs.
20,000. The firm had issued a cheque of Rs. 5,500
which has not been presented so far for payment.
What would be the balance as per cash book of
the firm:

A.Favorable Balance Rs. 14,500

B. Overdraft Balance Rs. 25,500
C. Overdraft Balance Rs. 14,500
D.Favorable Balance Rs. 25,500
 AFB-Paper 2 – JAIIB || DBF 2020

1 A credit entry in pass book means a credit entry

in cash book?
A. True
B. False
 AFB-Paper 2 – JAIIB || DBF 2020

2 Credit balance as per cash book means

unfavorable balance.
A. True
B. False
 AFB-Paper 2 – JAIIB || DBF 2020

3 Normally if cash book shows a debit balance, pass

book also shows a debit balance
A. True
B. False
 AFB-Paper 2 – JAIIB || DBF 2020

4 For a dishonored cheque deposited in the bank,

bank account is credited:
A. True
B. False
 AFB-Paper 2 – JAIIB || DBF 2020

5 The bank overdraft is Rs. 10,000/- as per pass

book. The company issued a cheque of Rs.
5,000/- which was not presented. The balance as
per cash book will be ____.
A. Rs. 16,000
B. Rs. 15,000
C. Rs. 5,000
D. Rs. 12,000
 AFB-Paper 2 – JAIIB || DBF 2020

7 The bank overdraft is Rs. 6,500/- as per pass

book. The company issued a cheque of Rs.3,000/-
which was not presented. The balance as per cash
book will be ____.
A. Rs. 3,500
B. Rs. 9,500
C. Rs. 5,000
D. Rs. 12,000
 AFB-Paper 2 – JAIIB || DBF 2020

8 A bank passbook is the copy of _____.

A. A customer’s account in the bank’s books
B. cash book relating to cash column
C. cash book
D. None of these
 AFB-Paper 2 – JAIIB || DBF 2020

9 Positive balance in the cash book will appear on

___ side.
A. Debit
B. Credit
 AFB-Paper 2 – JAIIB || DBF 2020

10 The bank overdraft is Rs. 10,000/- as per Passbook.

The company issued a cheque amounting to Rs.
4,000/- which was not presented. The balance as
per cash book will be Rs.
A. Rs. 14,000
B. Rs. 8,000
C. Rs. 12,000
D. Rs. 8,900
 AFB-Paper 2 – JAIIB || DBF 2020

11 Which among the following is not a part of

Double entry system?
A. Cash Book
B. Trial Balance
C. BRS
D. Journal
 AFB-Paper 2 – JAIIB || DBF 2020

12 Unfavorable bank balance means:

A. Credit balance in the Cash Book
B. Favorable balance in the cash book
C. Credit balance in the Passbook
D. None of these
 AFB-Paper 2 – JAIIB || DBF 2020

13 An accountant finds a debit balance in the Cash

Book and credit balances in the bank statement.
This implies that there is ___.
A. An overdrawn balance
B. A positive balance
C. A recording error
D. Wrong carry forward of balance
 AFB-Paper 2 – JAIIB || DBF 2020

14 A BRS is prepared periodically to find out the

causes of difference between the balances of
cash book and passbook:
A. True
B. False
 AFB-Paper 2 – JAIIB || DBF 2020

15 A BRS is
A. A ledger account
B. Part of the cash book
C. A statement prepared to find out the causes
of difference between bank column of cash
book and pass book
D. None of these
 AFB-Paper 2 – JAIIB || DBF 2020

6 Given :
• Bank overdraft as per Cash book Rs. 2,000
• Cheque drawn but not presented Rs. 2,420
• Interest charged by bank but not entered in
cashbook Rs. 75
• Dividend directly collected by bank Rs.200
• Cheque dishonored till date of transaction, no
intimation received – Rs. 1650