4 Marks Question

Question 14 Marks

The Cash book of Sh. Shokeen showed a balance of ₹ 20,000 on 31st December, 2023 at the bank. The figure did not agree with the bank Pass Book. A comparison of the two revealed the following :
i. The bank has debited Sh. Shokeen with ₹ 6,000, the annual premium on his life policy according to his standing instructions and with ₹ 150 as bank charges.
ii. The bank has credited Sh. Shokeen by ₹ 15,000, the proceeds of a bill.
iii. Sh. Shokeen sent for collection cheques amounting ₹ 60,000 out of which cheques for ₹ 48,000 have been credited by bank till 31st December.
iv. The cash collection on 31st December, 2023 totalling ₹ 25,000 was entered in the Cash Book in the bank column on the same day but it was banked on the 2nd January, 2024.
v. Sh. Shokeen issued cheques totalling ₹ 1,00,000 of which those of ₹ 36,000 have not been presented by 31st December, 2023.
Show the corrections to be made in the Cash Book so as to ascertain the balance to be shown in the Balance Sheet and then prepare the Bank Reconciliation Statement.

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Question 24 Marks

State any six reasons when the balance as per Cash Book will be higher than the balance as per Bank Pass Book or Bank Statement.

Answer

Balance as per Cash Book will be higher than the balance as per Bank Pass Book or Bank Statement in the following situations:
i. Cheques deposited but not collected by the bank.
ii. Cheque recorded in the Cash Book but not deposited in Bank.
iii. Interest debited by bank but not recorded in the Cash Book.
iv. Bank Charges debited by bank but not recorded in the Cash Book.
v. Payment by bank as per standing instructions, not recorded in Cash Book.
vi. Wrong debit by bank.

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Question 34 Marks

Mr. Jain operates two bank accounts both of which are maintained in the columnar cash book itself. You are required to prepare a proforma of the cash book, record the following transactions therein and draw the closing balances as on 30 June, 2023:

2023		₹
June 20	Opening Balance of Cash	1,180
	Progressive Bank	19,040
	Goodwill Bank (Overdraft)	6,460
20	Received a cheque for₹ 1,800 from a debtor Mr. X and deposited in Goodwill Bank. The Bank credited the amount on 23rd June and debited 4 as its collection charges.
21	Purchased goods for 18,210 and a cheque issued on Progressive Bank.
22	Paid office expenses 410 and 80 for stationery in cash.
23	Deposited a cheque for ₹21,090 being sale proceeds of goods in Progressive Bank. The Bank credited the amount on the same day and debited 21 as cheque discounting charges.
23	A cheque for₹ 8,000 drawn by Mr. Jain himself on Progressive Bank was deposited in his account with Goodwill Bank.
25	Cash drew from the account with Progressive Bank 600 for office use.
25	A cheque for 1,100 received from Mr. A and earlier deposited in Goodwill Bank (on 14 4th June) was returned unpaid and Bank debited 10 towards its charges. Mr. Jain received the amount of returned cheque and Bank charges in cash from Mr. A.
28	Deposited cash 1,500 in the account with Goodwill Bank.
29	Purchased postal stamps for 200 and paid in cash.

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Question 44 Marks

Following balances were extracted from the books of Rajesh Associates as at 31st March, 2023:Following balances were extracted from the books of Rajesh Associates as at 31st March, 2023:

	( ₹ )		(₹)
Sundry Debtors	4,10,000	Stock (April 1, 2022)	2,30,000
Sundry Creditors	80,000	Premises	12,00,000
Rent and Taxes	48,000	Fixtures & Fittings	3,10,000
Purchases	34,00,000	Bad Debts written off	8,000
Sales	56,00,000	Rent received from sub-let of part of premises	30,000
Trade Expenses	12,000	Loan from Rahul	1,50,000
Returns Outwards	80,000	Interest on Rahul's Loan	15,000
Returns Inwards	1,20,000	Drawings	40,000
Expenses	4,000	Cash in hand	75,000
Motor Vehicles	6,50,000	Stock on 31st March, 2023
Electricity	25,000	(not adjusted)	3,80,000

You are required to prepare the trial balance treating the difference as his capital.

Answer

Note: Closing Stock of ₹ 3,80,000 will not appear in Trial Balance, it will be shown after trial balance. Balance remains in trial balance is recorded as capital according to question.

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