Question

State with reasons, whether the following statements are True or False:

(a) Interest will be recovered by receiver if payment is made later than the average due date.

(b) In case the due date of a bill falls after the date of closing the account, the interest from the date of

closing to such due date is known as Red-Ink interest.

(c) Interest charged by the bank will be deducted, when the overdraft as per the cash book is made the

starting point for making the bank reconciliation statement.

(d) A cancellation entry is required, when a bill is renewed.

(e) Bank Reconciliation statement is prepared to arrive at the bank balance.​

Answer 1

1 is true 2 is true 3 is false 4 is false 5 is false

Answer 2

Answer:

The following statements are True or False:

Explanation:

(a)True: Interest will be recovered by receiver if payment is made later than the average due date

(b)True: In case the due date of a bill falls after the date of closing the account, the interest from the date of closing to such due date is known as Red-Ink interest.

(c)False: Interest charged by the bank will be deducted, when the overdraft as per the cash book is made the starting point for making the bank reconciliation statement.

(d) True: A cancellation entry is required, when a bill is renewed.

(e)False: Bank Reconciliation statement is prepared to arrive at the bank balance.