What will the balance as per bank statement after reconciliation the given causes of disagreements between bank column of cash book and bank statement? What will be the effect on net profit if above mentioned causes of disagreement between bank statement and bank column of cash book are not reconciled. Which fundamental accounting principle was violated due to the missing of reporting provision for doubtful debts in profit and loss account? What will be the correct amount of profit after considering the all above mentioned fact
Answers
Explanation:
The following are the important causes or reasons for the disagreement between the balances shown by the pass book and cash book.
1. Cheques issued but not presented for payment.
2. Cheques paid or deposited but not collected and credited by the bank.
3. Interest credited by the bank but entered in cash book.
4. Bank charges, commission and interest in overdraft debited by the bank but not entered in cash book.
5. Expenses directly paid by the bank on behalf of customer but not recorded in cash book.
6. Incomes directly collected by the bank on behalf of customer but not recorded in cash book.
7. Amount directly deposited into the bank by debtors but not entered in cash book.
8. Cheque deposited into the bank but dishonored.
9. Dishonor of bill discounted with the bank.
10. Errors committed in the cash book and pass book.
The following are the important causes or reasons for the disagreement between the balances shown by the pass book and cash book.
1. Cheques issued but not presented for payment.
2. Cheques paid or deposited but not collected and credited by the bank.
3. Interest credited by the bank but entered in cash book.
4. Bank charges, commission and interest in overdraft debited by the bank but not entered in cash book.
5. Expenses directly paid by the bank on behalf of customer but not recorded in cash book.
6. Incomes directly collected by the bank on behalf of customer but not recorded in cash book.
7. Amount directly deposited into the bank by debtors but not entered in cash book.
8. Cheque deposited into the bank but dishonored.
9. Dishonor of bill discounted with the bank
10. Errors committed in the cash book and pass book.