3.3.1 - Step 1: Compare the Balances
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Practice Questions
Test your understanding with targeted questions
What is the first step in preparing a Bank Reconciliation Statement?
💡 Hint: Think about the primary documents involved.
Why is it important to compare the bank balance and cash book?
💡 Hint: Consider the implications of inaccurate records.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the main purpose of comparing the balances in the cash book and bank statement?
💡 Hint: Think about what you are checking when you compare two sets of financial records.
True or False: Outstanding checks can lead to the bank statement balance being higher than the cash book balance.
💡 Hint: Consider which balance is affected when checks are not cashed.
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Challenge Problems
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If a company has a cash book balance of ₹10,000 and their bank statement balance is ₹9,000, with a deposit in transit of ₹2,000 and outstanding checks of ₹3,000, what needs to be done to reconcile?
💡 Hint: What balances are added or subtracted during reconciliation?
A company finds an error in their cash book where a transaction of ₹500 was recorded as ₹50. How does this affect the reconciliation process?
💡 Hint: Focus on how correcting errors impacts the cash book balance.
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