Which of the following statements in relation to bank reconciliation is true? A. The cash amount...

Which of the following statements in relation to bank reconciliation is true?

A. The cash amount reported in the statement of financial position must be the balance reported in the bank statement.

B. Credit memos will cause the cash balance per ledger to be higher than that reported by the bank, all other things being equal.

C. Bank service charge will cause the cash balance per ledger to be higher than that reported by the bank, all other things being equal.

D. Outstanding checks will cause the cash balance per ledger to be greater than the balance reported by the bank, all other things being equal.

Expert Solution

OPTION NO C. Bank Service Charge Will Cause the Cash balance per ledger to be higher than the reported by the bank , all other things being equal.

Reason.

When bank deducted any service charges from bank account we doesnt know until we get ledger from bank so we cant pass entry for that in our cash account , so due to this our Balance as per Cash ledegr is higher than the balance shown by Bank Ledger.

Reasons for not selecting other Options:

Option No 1 . If the balance as per Bank Statement and the Cash in Financial Account will same then there is no need of Bank Reconcilliation Statement . Because we make BRS for knowing the cause of difference in Bank Statement Balance and Balance as per Cash Ledger Maintained by Us .

Option No 2 The Credit Memos Does not COntain any term related to Cash so it doesnt affect any balance.

Option NO 4 Outstanding Checks is a check which is issued by us but not presented for payment in Bank So due to this Cash Balance as per Ledger is lower than the cash balance as per Bank Statement.

ekkarill92 answered 1 year ago

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