Who compiles the bank reconciliation statement____________?
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Answer: A. Accountant of the business
Explanation
The business accountant compiles the bank reconciliation statement because it reviews internal cash book records against external bank data. Bank employees do not manage internal accounting books for their corporate customers. Therefore, the internal finance team handles this routine control task. A bank reconciliation statement is an internal management tool used to verify accounting accuracy. It compares the cash account in the general ledger with the bank passbook. This process identifies any missing entries or timing differences.
Regular preparation by the internal accountant prevents undetected errors from accumulating in financial reports. It provides assurance to auditors that cash balances are properly controlled and verified. This task is a standard monthly duty in corporate accounting. Company managers oversee operations but rarely draft detailed reconciliation statements themselves. Bank controllers and bank accountants manage institutional ledgers rather than customer books. Only the business's accountant has direct access to both internal and external records.
- Subject
- Accounting and Finance
- Category
- Accounting
- Topic
- —
- Difficulty
- medium
Related questions
Q1. For what reason is a Bank Reconciliation Statement created?
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Answer: D. To bring out the reasons for the difference between the Balance as per Cash Book and the Balance as per Bank Statement
A bank reconciliation statement explains the differences between the cash book balance and the bank statement balance, such as timing and recording items. It reconciles any discrepancies to prove that both records are ac...
Q2. A bank reconciliation statement compares the statement provided by the bank with the _________ (compiled by the firm).
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Answer: C. Cash book
The bank reconciliation compares the bank statement with the cash book, which is the business's own record of its cash and bank transactions. By matching these two independent records, accountants identify discrepancies...
Q3. Given an adjusted cash book balance of $1000, unpresented checks of $2000, uncredited checks of $500, and a deposit in transit of $500, find the balance according to the bank statement.
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Answer: A. $2000
Starting from the adjusted cash book balance and reversing timing differences properly isolates the target bank balance. Adding unpresented checks and accounting for deposits reconciles the records to match the bank stat...
Q4. A positive or favorable balance in the cash book indicates that
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Answer: B. Debit balance of cash book
A positive cash book balance signifies that the business holds more cash receipts than it has paid out. In accounting, an increase in cash is recorded as a debit entry in the asset account. Thus, a favorable cash positio...
Q5. A favorable balance on a bank statement means that
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Answer: A. Credit balance
A bank statement reflects the bank's perspective of the customer's account, where liabilities are recorded as credits. When a bank holds money for a customer, it owes that money to the business. Consequently, a favorable...
Q6. A bank reconciliation is drafted to resolve differences between__________?
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Answer: D. Cash as per cash book with bank balance as per bank pass book
A bank reconciliation specifically compares the balance reported in the cash book with the balance on the bank pass book. It explains any timing differences or recording errors that cause the two figures to diverge. This...