Please explain the seventh entry of this question.
Dear student,
Explaination for the seventh entry of question no. 11 is given below:
When the cheques received from outside parties are deposited with the bank, these are immediately recorded on the debit side of the bank column of the cash book, but if the cheques are dishonoured, bank will not make any entry in the credit of customer's account. As a result, the cash book will show an increased balance in comparison to the pass book.
Hence, here in this case Rs. 5000 will be added to the bank balance given as per the pass book to get the balance as per the cash book in the bank reconciliation statement.
Regards.
Explaination for the seventh entry of question no. 11 is given below:
When the cheques received from outside parties are deposited with the bank, these are immediately recorded on the debit side of the bank column of the cash book, but if the cheques are dishonoured, bank will not make any entry in the credit of customer's account. As a result, the cash book will show an increased balance in comparison to the pass book.
Hence, here in this case Rs. 5000 will be added to the bank balance given as per the pass book to get the balance as per the cash book in the bank reconciliation statement.
Regards.