Test Your Knowledge - Bank Reconciliation

What is the main purpose of a bank reconciliation?

To ensure that the cash book and bank statement balances match
To record the company's transactions
To reconcile differences between accounts payable and accounts receivable

Which of the following is typically included in a bank reconciliation statement?

Bank charges
Depreciation
Inventory

What should be done if a discrepancy is found during the reconciliation process?

Ignore the discrepancy
Investigate the discrepancy and correct any errors
Adjust the company's cash book without investigation

Which of the following could be a cause of a bank reconciliation discrepancy?

Bank service charges
All deposits made by the company
Unpaid bills

Which document should be used to reconcile the company's cash book?

Sales invoices
Bank statement
Purchase orders

How often should a company perform a bank reconciliation?

Annually
Monthly
Weekly

What should be done if the company’s book balance is higher than the bank statement balance?

Investigate outstanding cheques or payments
Adjust the bank statement balance
Ignore the discrepancy

What type of error is corrected by reconciling the bank statement with the cash book?

Arithmetic errors
Timing errors
Both a and b

What happens when there are unrecorded deposits in the company’s cash book?

The company should add the deposits to the bank statement
The deposits should be added to the cash book balance
The deposits should be ignored

What does “outstanding cheques” refer to in bank reconciliation?

Cheques that have been recorded in the bank statement
Cheques that have been issued but not yet presented to the bank for payment
Cheques that the bank has refused to honor

Test Your Knowledge - You have 10 questions!