CBSE Class 11 Accountancy Important Questions Chapter 5 - Bank Reconciliation Statement - Free PDF Download
FAQs on Important Questions for CBSE Class 11 Accountancy Chapter 5 - Bank Reconciliation Statement
1. What is a Bank Reconciliation Statement and why is it important in Class 11 Accountancy?
A Bank Reconciliation Statement is a document prepared to match the balances shown in an organization’s cash book with the corresponding bank passbook as of a particular date. It is important in Class 11 Accountancy because it helps students understand how to identify and rectify differences between the two records, which is essential for accurate accounting and exam preparation as per the CBSE 2025–26 syllabus.
2. State three main causes of discrepancies between the cash book and passbook balances. (CBSE 2025–26)
The main causes of discrepancies are:
- Cheques issued but not yet presented to the bank
- Cheques deposited but not yet credited by the bank
- Direct bank charges, interest, or credits not yet recorded in the cash book
3. (3-mark) List the steps involved in preparing a Bank Reconciliation Statement in Class 11 Accountancy exams.
Steps to prepare a Bank Reconciliation Statement:
- Start with the balance as per the cash book or passbook
- Adjust for transactions recorded in one book but not in the other, such as unpresented cheques or bank charges
- Account for errors or omissions in either book
- Calculate the adjusted balance that should match both books
4. Why is it essential to prepare a Bank Reconciliation Statement regularly? (Frequently Asked in CBSE Board)
Preparing a Bank Reconciliation Statement regularly helps identify errors or fraud, ensures the accuracy of financial records, highlights unrecorded bank transactions, and enables timely correction of mistakes. This is crucial for both examination purposes and practical application in business.
5. (HOTS) Explain how timing differences lead to discrepancies in the Bank Reconciliation Statement. Illustrate with examples.
Timing differences occur when transactions are recorded in the cash book and bank passbook on different dates. For example, a cheque issued and entered in the cash book may not be presented to the bank until a later date, leading to a temporary mismatch. Similarly, cheques deposited but not yet cleared by the bank also cause timing differences. These must be adjusted in the reconciliation process.
6. What are the steps to deal with an overdraft balance while preparing the Bank Reconciliation Statement? (3-mark, CBSE 2025–26)
Steps for dealing with overdraft balance:
- Start with the overdraft as per the cash book or passbook
- Add items that increase the overdraft not yet entered in the cash book (e.g., bank charges, uncollected cheques)
- Deduct items that reduce the overdraft (e.g., unpresented cheques)
- The adjusted overdraft should reconcile both books
7. (5-mark) Prepare a proforma of a Bank Reconciliation Statement used in Class 11 Accountancy.
The proforma for a Bank Reconciliation Statement is:
- Start with Balance as per Cash Book (or Pass Book)
- Add: Cheques issued but not yet presented for payment
- Add: Credits in pass book only (e.g., direct deposits), unrecorded interests/dividends
- Less: Cheques deposited but not yet credited
- Less: Debits in pass book only (e.g., bank charges, direct debits)
- = Balance as per Pass Book (or Cash Book)
8. What are common errors that can occur while recording transactions in the cash book or passbook? (CBSE 2025–26)
Common errors include:
- Recording incorrect amounts
- Omitting entries altogether
- Double entry of a transaction
- Incorrectly posting a deposit as withdrawal or vice versa
9. (FUQ) How does direct electronic transfer create differences in the Bank Reconciliation Statement?
Direct electronic transfers, such as NEFT, RTGS, or direct bank credits, may not be immediately recorded in the cash book. This creates a discrepancy until the entry is updated in the business’s books, which will be reflected during the bank reconciliation process.
10. Describe the effect of unpresented and uncredited cheques in a Bank Reconciliation Statement. (3-mark, expected in CBSE 2025–26)
Unpresented cheques (issued but not yet presented for payment) increase the cash book balance relative to the passbook. Uncredited cheques (deposited but not yet collected by the bank) decrease the cash book balance in comparison to the passbook. Both need to be adjusted to reconcile the two balances.
11. (Application) Suggest precautions a student should take while preparing a Bank Reconciliation Statement for exams.
Precautions include:
- Carefully distinguishing between items that need to be added or subtracted
- Ensuring that all transactions are considered only once
- Cross-checking the direction of effect (increase or decrease) on the cash book balance
- Verifying calculations and formats as per the latest CBSE guidelines
12. Why is understanding Bank Reconciliation Statements considered a vital skill for commerce students, beyond exams? (FUQ)
It instills a habit of checking and balancing financial records, helps detect fraud or error, and builds foundational skills for future studies or careers in accountancy, finance, and business management, making it crucial for real-world financial responsibility.
13. What happens if Bank Reconciliation Statement is not prepared on time? (FUQ)
Not preparing a Bank Reconciliation Statement on time may result in undetected errors, fraud, or discrepancies, leading to incorrect financial statements and possibly impacting grades in CBSE assessments, as well as future business operations.
14. (Expected) How will you treat interest credited by the bank but not recorded in the cash book, while preparing a Bank Reconciliation Statement?
Interest credited by the bank but not recorded in the cash book should be added to the cash book balance during reconciliation, ensuring both bank and cash book balances match as per the correct figure.
15. (Advanced FUQ) How can you differentiate between errors in the cash book and errors in the passbook when reconciling?
Errors in the cash book are detected when the passbook entries are correct but differences persist, suggesting mispostings, omissions, or wrong amounts in the cash book. Errors in the passbook arise when bank entries do not agree with actual transactions, often needing communication with the bank for correction. Understanding both improves accuracy in reconciliation.
