alleryBills receivable discounted with bank, charged ₹1,600 on dishonour of ₹80,000 bill. Starting with debit balance in cash book, the deduction to reach pass book is:
A₹80,000 of bills face
B₹1,600 charges only
C₹78,400 of net amount
D₹81,600 of total amount
Answer & Solution
Correct answer: D. ₹81,600 of total amount
1. Bill of ₹80,000 dishonoured plus ₹1,600 charges = bank debits the entity ₹81,600 in pass book.
2. Cash book has not yet recorded either item.
3. From debit cash book balance, subtract ₹81,600 to reach pass book balance.
_Source: ICAI BoS Foundation Paper 1, Ch 3 "Bank Reconciliation Statement", T/F #17_
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