Bank Reconciliation Statement MCQs

1. An institution, which purchases and sells money and transacts other financial business of such nature is called:
(a) Money market
(b) Stock Exchange
(c) Bank
(d) Capital market
Bank
2 Functions which are performed by bank for the benefit of general public.
(a) Primary functions
(b) Secondary functions
(c) Agency functions (d) General utility functions
General utility functions
3. When bank borrow and lends money in various ways, it is called its:
(a) General utility function (b) Agency function
(c) Primary function
(d) Secondary function
Primary function
4. Written order by one Govt. department to particular Govt. treasury to pay a stated sum of money to the person named therein is called:
(a) Treasury order
(b) State Bank order
(c) Govt. order
(d) Postal order
Treasury order
5. When bank acts as an agent of their customers and performs great service in that capacity, these are called:
(a) Primary Functions
(b) Agency functions
(c) Secondary functions
(d) General utility functions
Agency functions
6. Collection of interest and dividend on behalf of customer by bank is called its:
(a) Primary function
(b) Agency function
(c) Secondary function
(d) General utility function
Agency function
7. Providing facility of safe to customers for their precious good,
called:
(a) Primary function of bank
(b) Secondary function of bank
(c) General utility function of bank (d) Agency function of bank
General utility function of bank
8. Which book is issued by bank to customer as a copy of his account the bank ledger?
(a) Cheque book
(b) Pass book
(c) Pay-in-slip book
(d) (b) and (c)
Pass book
9. Which book is issued by bank to customers for withdrawal of money?
(a) Cash book
(b) Pass book
(c) Pay-in-slip book
(d) Cheque book
Cheque book
10. Which book is issued by bank to i customer to deposit money in the bank?
(a) Pass book
(b) Pay-in-slip book
(c) Cheque book
(d) Bank book
Pay-in-slip book
11. From what bank account the customer is allowed to deposit or withdras money as and when he desires?
(a) Saving account
(b) Fixed deposit account
(c) Current account
(d) (a) and (c)
Current account
12. An account in which deposits can be made only upto a certain amount and withdrawals are allowed twice a thrice in a week upto a certain amount is called:
(a) Current account
(b) Saving account
(c) Fixed deposit account
(d) (b) and (c)
Saving account
13. Bank account, in which deposits are made for fixed period of time is called:
(a) Current account
(b) Saving account
(c) Fixed deposit account
(d) (a) and (c)
Fixed deposit account
14. A bank client can withdraw from his account or make payment to various
parties by issue of:
(a) Cheque
(b) Pay-in-slip
(c) Overdraft
(d) (a) and (c)
Cheque
15. Which document should be filled up when money is deposited in the bank?
(a) Pay-in-slip
(b) Cheque
(d) Postal order
(c) Bank draft
Pay-in-slip
16. A cheque that can be en-cashed at the counter of the bank is called:
(a) Cross cheque
(b) Bearer cheque
(c) Blank cheque
(d) Simple cheque
Bearer cheque
17. A cheque that cannot be encashed at the counter except is called:
(a) Cross cheque
(b) Bearer cheque
(c) Blank cheque
(d) Simple cheque
Cross cheque
18. Cheque bearing a date previous to the date on which it is drawn is called:
(a) Bearer cheque
(b) Anti-dated cheque
(c) Open cheque
(d) Post dated cheque
Anti-dated cheque
19. The cheque bearing a future date is called:
(a) Bearer cheque
(b) Anti-dated cheque
(c) Open cheque
(d) Post dated cheque
Post dated cheque
20. A cheque which is duly met by drawee bank is called:
(a) Dishonoured cheque
(b) Honoured cheque
(c) Bearer cheque
(d) Accepted cheque
Honoured cheque
21. A cheque which is returned by-the bank unpaid is called:
(a) Dishonoured cheque
(b) Honoured cheque
(c) Refused cheque
(d) Rejected cheque
Dishonoured cheque
22. A fixed sum advanced by commercial bank for a definite period of time is called:
(a) Overdraft
(b) Loan
(c) Bank draft
(d) (a) and (b)
Loan
23. When a customer is authorized to borrow an agreed amount in excess of the customer’s bank balance, it is called:
(a) Bank draft
(b) Bank over draft
(c) Bank loans
(a) and (b)
Bank over draft
24. When two parallel lines are drawn on the face of the cheque, it is called:
(a) Bearer cheque
(b) Multilated cheque
(c) Cancelled cheque
(d) Crossed cheque
Crossed cheque
25. How many lines are drawn on the face of the cheque, when it is crossed?
(a) Three lines
(b) One line.
(c) Two lines
(d) Four lines
Two lines
26. In what shape, lines are drawn across the cheque, when it is crossed:
(a) Concave lines
(b) Convex lines
(c) Parallel lines
(d) (a) and (b)
Parallel lines
27. When a saving account is opened with bank, it provides its customers:
(a) Pass book
(b) Pay-in-slip-book
(c) Cheque book (d) All of above
All of above
28. Bank borrow money in the form of deposits and lends it in different ways, it is called its:
(a) Agency function
(b) General utility function
(c) Constitutional function
(d) Primary Function
Primary Function
29. Mundi is almost like a:
(a) Bank overdraft
(b) Bank draft
(c) Pass book
(d) None of these
Bank draft
30. The process of signing on the back of the cheque in order to transfer it to other person is called
(a) Drafting
(b) Crossing
(c) Endorsement
(d) Negotiation
Endorsement
31. Commercial banks provide the facility of transfer of money through
(a) Bank draft
(b) Overdrafts
(c) Crossed cheque
(d) (b) and (c)
Bank draft
32. The books in which transactions are, recorded in detail as they occur from day to day in a classified manner are called
(a) Secondary books.
(b) Subsidiary books
(c) Voucher books
(d) Transaction book
Subsidiary books
33. The cash book is called:
(a) Journal
(b) Ledger
(c) Subsidiary journal
(d) Account book
Ledger
34. Which column is prepared in single column cash book?
(a) Cash column
(b) Bank column
(c) Discount column
(d) All of the above
All of the above
35. Which columns are prepared in double column cash book?
(a) Cash and bank columns
(b) Cash and discount columns (c) Bank and discount columns
(d) None of above
Cash and discount columns
36. Which is recorded in three columns cash book?
(a) All receipts and payments
(b) All cash and discount
transaction
(c) All cash, bank and discount transactions
(d) None of above
All cash, bank and discount transactions
37. Cash purchases are recorded in large organization in:
(a) Purchases day book
(b) Purchases journal
c) General journal ( (d) Cash Book
Cash Book
38. Cash sales are recorded in established firms in:
(a) Cash book
(b) Sales book
(c) Sales journal
(d) None of these
Cash book
39. The balance of the cash column always represents:
(a) Overdraft
(c) Credit
(b) Debit
(d) None of these
Debit
40. Balance of petty cash represents: book always
(a) An expense (c) A liability
(b) An asset
(d) None of these
An asset
41. The petty cash book is used for recording:
(a) Petty cash receipts & payments
(b) Petty cash expenses
(c) Petty cash receipts
Petty cash receipts & payments
42. All cash receipts Cash discount is provided on:
(a) Sales and purchases
(b) Early payment (c) Prompt payment
(d) (b) and (c)
(b) and (c)
43. Contra entry is made in cash book:
(a) When cash is withdrawn from bank for office use
(b) When cash is deposited into bank
(c) When a cheque received but deposited on any future date
(d) All of the above
All of the above
44. In three columns cash book, discount column is:
(a) Totaled
(b) Balanced
(c) Carry forward (d) (a) & (b)
Totaled
45. In three columns cash book, cash and bank columns are:
(a) Balanced
(b) Totaled
(c) Subtracted
(d) (a) and (b)
Balanced
46.The book in which small payments the refreshment etc. are recorded is:
(a) Main cash book
(b) Petty cash book
(c) Cash Account
(d) None of these
Petty cash book
47.Debit balance of cash book is also
called (a) Favourable balance
(b) Unfavourable balance Positive balance
(d) None of these
Favourable balance
48.Credit balance of cash book is also called
(a) Unfavourable balance
(b) Favourable balance
(c) Negative balance
(d) None of these
Unfavourable balance
49.A cheque returned by bank unpaid is
recorded on:
(a) Debit side of cash book
(b) Credit side of cash book
(c) Return inwards book
(d) None of these
Credit side of cash book
50 If an amount is entered on the debit side of an account and the same. amount is also entered on the credit side of an account this transaction
represents:
(a) Compound entry
(b) Double entry
(c) Contra entry
(d) None of these
Contra entry
51. An entry which is not posted to ledger is called:
(a) Contra entry
(b) Double entry
(c) Contingent entry
(d) Compound entry
Contra entry
52. Unfavourable balance of passbook represents:
(a) Debit balance
(b) Credit balance
(c) Zero balance
(d) Negative balance
Debit balance
53. Favourable balance of pass book represents:
(a) Debit balance
(b) Credit balance
(c) Positive balance
(d) Nil balance
Credit balance
54. In cash book, if nature of balance is not mentioned, it represents:
(a) Favourable or debit balance
(b) Unfavourable or credit balance
(c) Favourable or credit balance
(d) None of above
Favourable or debit balance
55. Petty cash book is branch of:
(a) Pass book
(b) Cash book
(c) Journal
(d) Ledger
Cash book
56. Petty cash system is arranged in organization to meet the needs of
(a) Small business
(b) Small expenses and miscellaneous
(c) (a) and (b)
(d) None of these
Small expenses and miscellaneous
57. Petty cash is always restored to the original amount in:
(a) Imprest system of petty cash
(b) Analytical system
(c) Fixed advance system
(d) Open system
Imprest system of petty cash
58. What would not appear in monthly bank statement?
(a) Interest credited by bank
(b) Interest charged by bank
(c) A payment from petty cash
(d) None of above
A payment from petty cash
59. A cheque or cash is deposited by customer in the bank with the help of
(a) Pay-in-slip
(b) Bank draft
(c) Cash book
(c) None of these
Pay-in-slip
60. Disagreement in balances may occur due to mistakes or omission in the
(a) Pass book
(b) Cash book
(c) Bank column of cash book
(d) Cash book pr pass book
Cash book pr pass book
61. Bank statement shows:
(a) A copy of customer’s account in the bank’s ledger
(b) A copy of cash book of customer
(c) A copy of other customers accounts in bank’s ledger
(d) None of these
A copy of customer’s account in the bank’s ledger
62. A statement which provides complete and satisfactory explanation of disagreement in balances as per cash book and bank statement:
(a) Balance statement
(b) Bank statement
(c) Bank reconciliation statement
(d) None of these
Bank reconciliation statement
63. Who prepares bank reconciliation statement?
(a) Client
(b) Banker
(c) Auditor
(d) None of these
Client
64. Bank account r presents:
(a) Real account
(b) Nominal account
(c) Personal account
(d) None of these
Personal account
65. Bank reconciliation represents:
(a) Ledger
(b) Journal
(c) Statement
(d) None of these
Statement
66. Credit balance of pass book must be equal to debit balance of.
(a) Cash book
(b) Banks ledger
(c) Client other’s account
(d) None of these
Cash book
67. A bank account on which interest is not allowed by bank is called:
(a) Saving account
(b) Current acco4nti
(c) Fixed deposit account
(d) None of these
Current acco4nti
68. Which entry is appeared on both sides of cash book?
(a) Compound entry
(b) Double entry
(c) Contra entry
(d) None of these
Contra entry
69. Subsidiary books are also called:
(a) Books of original entries
(b) Books of secondary entries
(c) Books of general entries
(d) None of these
Books of original entries
70. Those transactions for which there is no separate book for recording are recorded in:
(a) Special journal
(b) General journal
(c) Subsidiary journal
(d) None of these
General journal
71. The balance of petty cash represents
(a) Asset
(b) Expense (d) Income
(c) Liability
Asset
72. Discount columns of the cash book are:
(a) Added
(b) Balanced
(c) Equalized
(d) None of these
Added
73. Cash book is prepared by:
(a) Banker
(b) Third party
(d) None of these
(c) Customer
Customer
74. Cash account is a:
(a) Nominal account
(b) Real account
(c) Personal account
(d) None of these
Real account
75. All cash receipts & payments are recorded in:
(a) Cash receipts journal
(b) Cash payments journal
(d) None of these
(c) Cash book
Cash book
76. A copy of customer account in the bank ledger is called:
(a) Cash book
(b) Bank account
(c) Bank statement
(d) None of these
Bank statement
77. Debit balance of pass book is alse called:
(a) Unfavourable balance
(b) Favourable balance
(c) Nil Balance
(d) None of these
Unfavourable balance
78. Debit balance of cash book is also called:
(a) Unfavourable balance
(b) Favourable balance
(d) None of these
(c) Nil balance
Favourable balance
79. Three column cash book records:
(a) All receipts and payments
(b) All cash and bank transactions
(c) All cash and bank transactions including discount
(d) None of these
All cash and bank transactions including discount
80. A contra entry means an entry which 80 appears on:
(a) Debit side of cash book
(b) Credit side of cash book (c) Both sides of cash book
(d) None of these
None of these
81.A book of original entry in which all purchases return are recorded
chronologically is called (a) Purchases return journal
(b) Purchases book
(c) Purchases return day book
(d) (a) & (c)
(a) & (c)
82.Cheques deposited into the bank but have not yet been collected by the bank are also called:
(a) Uncollected cheques (b) Uncredited cheques
(c) Unpresented cheques
(d) (a) & (b)
(a) & (b)
83. The term imprest system is used in:
(a) Purchases book
(b) Sales book (c) Cashbook
(d) Petty cash book
Petty cash book
84. The credit balance of bank account in cash book is called:
(a) Expense
(b) Asset
(c) Income
(d) Liability
Liability
85. Credit note is issued by:
(b) Buyer
(a) Seller
(d) Principal
(c) Agent
Seller
86. The document sent to customer when he returns the goods is called:
(a) Promissory note
(b) Debit note (c) Currency note
(d) Credit note
Credit note
87. The credit balance of bank account in cash book is called:
(a) Expense
(b) Asset (d) Liability
(c) Income
Liability
88. A cash deposit made by business appears on the bank statement as balance:
(a) Debit
(b) Credit
(c) Expenses
(d) Liability
Credit
89. Bank reconciliation statement is the comparison of a bank statement (sent by bank) with the (prepared
by business): (a) Cash receipt journal
(b) Cash payment journal
(c) Cash book
(d) Financial statements
Cash book
90. A check returned by bank marked “NSF” means that:
(a) Bank can’t verify your identity
(b) There are not sufficient funds in
(c) Check has been forged
(d) Check can’t be cashed being illegal
There are not sufficient funds in
91 . In the Bank reconciliation statement “Deposit in transit” is usually.
(a) Subtracted from bank balance
(b) Added to bank balance
(c) Added to Cash book balance
(d) Subtrapted from cash book
Added to bank balance
balance 92. Bank reconciliation statement is
prepared by:
(a) Accountant of the business
(b) Manager of the business
(c) Controller of the bank
(d) Accountant of the bank
Accountant of the business
93. Which of the following error results in unadjusted cash book balance?
(a) Outstanding checks
(b) Unpresented checks
(c) Deposit in trans
(d) Omission of Bank charges
Omission of Bank charges
94. Bank charges amounting to $5000 was
not entered in the cash book. Identify
the correct adjustment in cash book
(a) Bank charges will be debited in cash book
(b) Bank charges will be added to cash book balance
(c) Bank charges will be credited in cash book
(d) Bank charges need adjustment in cash book
Bank charges will be credited in cash book
95. Unpresented checks also referred as:
(a) Uncollected checks
(b) Uncredited checks
(c) Outstanding checks
(d) Bounced checks
Outstanding checks
96. are checks that are issued by the business but not yet presented to bank:
(4) Upcollected checks
(b) Uncredited checks
(c) Outstanding checks (4) Bounced checks
Outstanding checks
97.checks that are presented to bank but not yet credited by the bank
(a) Unpresented checks
(b) Uincredined checks (c) Outstanding checks
Bounced checks
Uincredined checks
98. Uncollected checks also referred as
(a) Linpresented checks
(b) Uncredited checks
(c) Outstaroung checks (d) Bounced checks
Uncredited checks
99. Favourable balance of bank statement implies that:
(a) Credit belance
(b) Debit, balance
(c) Bank overdraft (d) Adjusted balance
Credit belance
100. Standing orders are
(Credited in the cash book
(b) Debited in the cash book
(c) Entered in the bank statement
(d) Entered in the petty cash balance

101. A company was entered in hire purchase agreement and had to pay $1000 per month. Three payments were made via bank account but no entry was found in cash book. Identify the correct adjustment in cash book:
(a) $1000 will be added to cash book bhalance
(b) $2000 will be deducted from cash book balance
(c) $3000 will be added to cash book balance
(d) $3000 will be subtracted from cash book balance
$3000 will be subtracted from cash book balance
102. $5000 deposited in bank account was entered twice in the cash book. Identify the correct adjustment in ca h book
(a) $5000 will be credited
(b) $5000 will be debited
(c) $10,000 will be credited
$5000 will be debited
(d) $10,000 will be debited
103. Bank sent debit advice of $500 to company being interest on overdraft. It wasn’t entered in cash book. Identify the correct adjustment in cash book
(a) $500 will be debited
(b) $500 will be credited
(c) Non-adjustable
all be subtracted (d) $1000 will be
$500 will be credited
104. In bank reconciliation statement the amount of outstanding checks is added to balance of cash book:
(a) Adjusted
(c) Understated
(d) Overstated
(b) Unadjusted
Adjusted
105. Balance as per cash book (adjusted) = $1000, Unpresented checks = $2000, Uncredited checks = $500, Deposit in transit $500. Compute the balance
as per bank statement:
(a) $2000
(b) Zero
(d) $2500
(c) $3000
$2000
106. A discount of $2000 was given to a supplier on his prompt repayment of debt but the cashier entered the gross amount in cash book. What should be the adjustment in cash to work out the correct balance of cash book?
(a) $2000 will be debited in cash book
(b) $2000 will be credited in cash book
(c) $4000 will be debited in cash book
(d) $4000 will be credited in the cash book
$2000 will be credited in cash book

Bank Reconciliation Statement MCQs
By: Prof. Dr. Fazal Rehman | Last updated: July 28, 2024

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