While preparing a bank reconciliation statement from the passbook overdraft balance, a cheque deposited but not yet collected by the bank should be: MCQ with Answer and Explanation

While preparing a bank reconciliation statement from the passbook overdraft balance, a cheque deposited but not yet collected by the bank should be:
A. Deducted
B. Added
C. Depends on amount
D. No effect
Answer: Option A
Solution (By JKSSB Mock Tests)
Starting with overdraft as per passbook, a deposit in transit increases the overdraft in passbook (makes it less negative). To reconcile to cash book overdraft, we deduct it because the cash book already recorded it and shows a lower overdraft. So deduct.

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Practice More Accountancy and Book Keeping Questions

Question #1
The 'Internal Financial Controls' reporting is required under:
A. Section 143(3)(i) of Companies Act, 2013
B. Income Tax Act
C. GST Act
D. CARO 2020

Correct Answer: Option A


Explanation:
Auditor's report must state whether the company has adequate internal financial controls system.

Question #2
Income received in advance is a:
A. Fixed Asset
B. Current Liability
C. Fictitious Asset
D. Current Asset

Correct Answer: Option B


Explanation:
Money received for services yet to be performed creates an obligation to provide the service, thus it is a liability.

Question #3
'AS 22' covers:
A. Earnings per share
B. Impairment of assets
C. Borrowing costs
D. Accounting for Taxes on Income

Correct Answer: Option D


Explanation:
AS 22 deals with deferred tax and current tax.