difference cause due to bank charges of Rs 500 debited to firm's current account by the bank is an example of difference caused due to time lag true or false
Answers
Explanation:
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Transactions
Time Gap
Errors made by
business / bank
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Cheque issued to customer but not presented for payment.
Cheque amounting to Rs.5,000 issued to M/s XYZ but recorded as Rs.500 in the cash book.
Interest credited by the bank but not yet recorded in the cash book.
Cheque deposited into the bank but not yet collected by the bank.
Bank charges debited to firm's current account by the bank.
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Answer:
it is true and why let us explain
The Bank Statement is prepared by the bank.
Explanation:
Below are listed the reasons for the discrepancy that result from time lag.
- When the date of issuance and the date of presenting the checks are different, i.e., issued checks are not submitted for payment within the period for which the bank reconciliation statement is being created.
- In contrast to the Pass Book, where checks are deducted when submitted for payment, the Cash Book credits checks on the date specified on them. On the date specified on the check, the bearer of the cheque may occasionally fail to produce it for payment. The timing mismatch between the date of issue and the date that the check is presented to the bank for payment might result in a discrepancy between the Cash Book and the Pass Book balances.
- When the bank reconciliation statement is being created for a period during which the cleared checks that have been deposited have not cleared. Typically, the cleared check's date of deposit and date of clearance is not the same since clearing a check takes time. When a check is deposited at the end of a period for which the bank reconciliation statement is created and the check is cleared in the next period, the balances of the Cash Book and the Pass Book diverge.
The causes of difference which occur because of time lag:
The following are the causes of differences that occurred due to time lag:
- Cheque issued but not presented for payment at the bank
- Cheque deposited or paid but not collected and credited by the bank.
- Amounts are directly deposited in the bank account.
- Direct debits are made by the bank on behalf of the customer.
- Direct payments are made by the bank on behalf of customers.
- Dividends and interests are collected by the bank.
- Cheque deposited or bills discounted dishonoured.
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