Bank Reconciliation Interview Questions & Answers

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Bank Reconciliation Interview Questions & Answers

Are you a B.com graduate? Are you interested to work in the banking sector? Are you searching for bank reconciliation jobs? Then log on to www.wisdomjobs.com. Bank reconciliation is a periodic procedure that allows a company to balance bank balances with amounts recorded in accounting ledgers. A reconciliation accountant could be an accounting clerk or a senior accounting specialist who is responsible for the reconciliation of outstanding deposits to balance financial records with a moderate level of complexity. All the job seeking candidates explore your career as bank reconciliation associate, reconciliation representative, reconciliation specialist, reconciliation clerk etc, by looking into bank reconciliation job interview questions and answers and boost your confidence to attend the interview successfully wihout any fear.

Bank Reconciliation Interview Questions

Bank Reconciliation Interview Questions
    1. Question 1. Explain The Reasons Which Cause Pass Book Of The Bank And Your Bank Book Not Tally?

      Answer :

      1. Cheques deposited into the bank but not yet collected.
      2. Cheques issued but not yet presented for payment.
      3. Bank charges.
      4. Amount collected by bank on standing instructions of the concern.
      5. Amount paid by the bank on standing instructions of the concern.
      6. Interest debited by the bank.
      7. Interest credited by the bank.
      8. Direct payment by customers into the bank account.
      9. Dishonour of cheques.
      10. Clerical errors.

    2. Question 2. What Are The Important Things To Be Remembered While Preparing A Bank Reconciliation Statement?

      Answer :

      While preparing a bank reconciliation statement following important points need to be remembered:

      • Bank Reconciliation Statement is prepared either by starting with the Bank pass book balance or Cash book balance.
      • If the balance of the Cash book is taken as a starting point then Cash book balance is to be adjusted in accordance with the entries passed in the Bank pass book and vice versa. For example: If the balance is taken as per the Cash book then the following items will be added:
      • Cheques issued but not presented for payment;
      • Amount credited in Passbook but not in Cash book;
      • Deposits made in the bank directly;
      • Wrong credits given by bank;
      • Interest credited in the Passbook.

      The following items will be subtracted: 

      • Cheques deposited but not cleared;
      • Interest/Bank Charges debited by bank
      • Direct payments made by bank not entered in Cash book
      • Cheques dishonoured not recorded in cash book
      • Wrong debits given by bank
      • If it is prepared with the Bank balance as per the bank passbook, then the above procedure will be reversed i.e the items will be added to the pass book which were deducted from the cash book balance and those items will be deducted from the bank pass book balance which were added to the cash book balance.

    3. Question 3. Explain Bank Reconciliation Statement. Why Is It Prepared?

      Answer :

      Bank Reconciliation Statement is a statement prepared to reconcile the balances of cash book maintained by the concern and pass book maintained by the bank at periodical intervals. At the end of every month entries in the cash book are compared with the entries in the pass book.

      The causes of differences in balances of both the books are scrutinized and then reconciliation statement is prepared. This statement is prepared for a special purpose and once in a month. It is prepared with a view to indicate items which cause difference between the balances as per the bank columns of the cash book and the bank pass book at a particular date.

    4. Question 4. Explain Step For Preparing A Bank Reconciliation Statement?

      Answer :

      • Bank Reconciliation Statement is prepared either by starting with the Bank pass book balance or Cash book balance.
      • If the balance of the Cash book is taken as a starting point then Cash book balance is to be adjusted in accordance with the entries passed in the Bank pass book and vice versa. For example: If the balance is taken as per the Cash book then the following items will be added:
      • Cheques issued but not presented for payment;
      • Amount credited in Passbook but not in Cash book;
      • Deposits made in the bank directly;
      • Wrong credits given by bank;
      • Interest credited in the Passbook.

    5. Question 5. Explain Things To Avoid While Preparing A Bank Reconciliation Statement?

      Answer :

      • Cheques deposited but not cleared;  
      • Interest/Bank Charges debited by bank
      • Direct payments made by bank not entered in Cash book
      • Cheques dishonored not recorded in cash book
      • Wrong debits given by bank
      • If it is prepared with the Bank balance as per the bank passbook, then the above procedure will be reversed i.e the items will be added to the pass book which were deducted from the cash book balance and those items will be deducted from the bank pass book balance which were added to the cash book balance.

    6. Question 6. What Should Be The Qualities Of Bank Reconciliation Clerk?

      Answer :

      In order to score in this interview question, a efficient way is to give a list of qualities and skills that is suitable with an admin assistant position. You can start with “Firstly, an admin must have effective methods, secondly, give job the priority, thirdly, create a good team work” etc. Remember that the duty of an admin assistant is to communicate with several of people, so excellent communication skills and a good personality are required.

    7. Question 7. Who Maintains Bank Reconciliation Statement?

      Answer :

      Bank Reconciliation statement is prepared when bank balance as our books and bank balance as per pass book (i.e bank book) differ…it basically prepared to rectify the error occurred during the bank transactions.

    8. Question 8. What Have You Done To Improve Your Knowledge For Bank Reconciliation Clerk Position In The Previous Year?

      Answer :

      • Try to include improvement activities that relate to the job. A wide variety of activities can be mentioned as positive self­improvement. Have some good ones handy to mention. 
      • Employers look for applicants who are goal­oriented. Show a desire for continuous learning by listing hobbies non­work related. Regardless of what hobbies you choose to showcase, remember that the goal is to prove selfsufficiency, time management, and motivation. 

    9. Question 9. What Items Will Be Subtracted While Preparing A Bank Reconciliation Statement?

      Answer :

      • Cheques deposited but not cleared
      • Interest/Bank Charges debited by bank
      • Direct payments made by bank not entered in Cash book
      • Cheques dishonored not recorded in cash book
      • Wrong debits given by bank
      • If it is prepared with the Bank balance as per the bank passbook, then the above procedure will be reversed i.e the items will be added to the pass book which were deducted from the cash book balance and those items will be deducted from the bank pass book balance which were added to the cash book balance.

       

    10. Question 10. Tell Me What Are The Important Things To Be Remembered While Preparing A Bank Reconciliation Statement?

      Answer :

      • Bank Reconciliation Statement is prepared either by starting with the Bank pass book balance or Cash book balance.
      • If the balance of the Cash book is taken as a starting point then Cash book balance is to be adjusted in accordance with the entries passed in the Bank pass book and vice versa. For example: If the balance is taken as per the Cash book then the following items will be added.
      • Cheques issued but not presented for payment.
      • Amount credited in Passbook but not in Cash book.
      • Deposits made in the bank directly.
      • Wrong credits given by bank.
      • Interest credited in the Passbook.

       

    11. Question 11. What Is Bank Reconciliation?

      Answer :

      A bank reconciliation is the process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement. The goal of this process is to ascertain the differences between the two, and to book changes to the accounting records as appropriate.

    12. Question 12. What Do You Mean By Bank Reconciliation Statement?

      Answer :

      A Bank reconciliation is a process that explains the difference between the bank balance shown in an organization's bank statement, as supplied by the bank, and the corresponding amount shown in the organization's own [accounting] records at a particular point of time.

    13. Question 13. What Is The Purpose Of Reconciling A Bank Statement?

      Answer :

      A bank reconciliation is used to compare your records to those of your bank, to see if there are any differences between these two sets of records for your cash transactions. The ending balance of your version of the cash records is known as the book balance, while the bank's version is called the bank balance.

    14. Question 14. What Is The Meaning Of Reconciliation Statement?

      Answer :

      A reconciliation statement is a document that begins with a company's own record of an account balance, adds and subtracts reconciling items in a set of additional columns, and then uses these adjustments to arrive at the record of the same account held by a third party.

    15. Question 15. What Is Bank Reconciliation Statement With Example?

      Answer :

      A bank reconciliation is the process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement. The goal of this process is to ascertain the differences between the two, and to book changes to the accounting records as appropriate.

    16. Question 16. What Do You Mean By Gl Reconciliation?

      Answer :

      General Ledger Reconciliation is the process performed by accountants to verify the integrity of account balances on the company's general ledger of accounts.

    17. Question 17. What Is A Reconciliation Account?

      Answer :

      In accounting, Reconciliation is the process of ensuring that two sets of records (usually the balances of two accounts) are in agreement. Reconciliation is used to ensure that the money leaving an account matches the actual money spent.

    18. Question 18. What Is A Reconciliation Process?

      Answer :

      Reconciliation is an accounting process that uses two sets of records to ensure figures are accurate and in agreement. Reconciliation is the key process used to determine whether the money leaving an account matches the amount spent, ensuring the two values are balanced at the end of the recording period.

    19. Question 19. What Is The Meaning Of Brs In Accounting?

      Answer :

      A bank reconciliation statement is a summary of banking and business activity that reconciles an entity's bank account with its financial records. The statement outlines the deposits, withdrawals, and other activity impacting a bank account for a specific period.

    20. Question 20. Why Is Bank Reconciliation Statement Prepared?

      Answer :

      Bank reconciliation statement is a statement prepared on a particular day to reconcile the bank balance as per Cash book or Bank statement showing entries causing difference between the two balances.

    21. Question 21. What Is The Importance Of Bank Reconciliation?

      Answer :

      Importance of Bank Reconciliation :

      • Preparation of bank reconciliation helps in the identification of errors in the accounting records of the company or the bank.
      • Cash is the most vulnerable asset of an entity. Bank reconciliations provide the necessary control mechanism to help protect the valuable resource through uncovering irregularities such as unauthorized bank withdrawals.
      • However, in order for the control process to work effectively, it is necessary to segregate the duties of persons responsible for accounting and authorizing of bank transactions and those responsible for preparing and monitoring bank reconciliation statements.
      • If the bank balance appearing in the accounting records can be confirmed to be correct by comparing it with the bank statement balance, it provides added comfort that the bank transactions have been recorded correctly in the company records.
      • Monthly preparation of bank reconciliation assists in the regular monitoring of cash flows of a business.

    22. Question 22. When Bank Reconciliation Statement Prepared?

      Answer :

      Normally Bank Reconciliation Statement is prepared by the trader on closing date of accounts, i.e., Dec. 31 or June 30 or March 31. Sometimes it is prepared at the end of every month after preparing Cash Book or regularly after certain interval to check the accuracy of Cash Book. statutory there is no specific date to prepare it.

    23. Question 23. What Are The Steps For Preparing A Bank Reconciliation Statement?

      Answer :

       Steps in preparing a bank reconciliation statement: 


      Step 1 – Find the deposits in transit: The first step is to see if one or more deposits are in transit. You can do so by comparing the deposits in your accounting record with the deposits shown in your bank statement. If you find a deposit in your accounting record that has not been shown in the bank statement, it means that deposit is in transit.

      Add to the bank statement balance all deposits that are in your accounting record but have not been entered in the bank statement.

      Step 2 – Find outstanding/unpresented checks and deduct from bank statement balance: Find all checks that you have issued but have not been presented for payment. You can do so by comparing the checks issued in your accounting record with the checks paid in your bank statement. If your accounting record shows that a check has been issued and your bank statement does not show a corresponding entry for that check, it means it is an outstanding or unpresented check.

      Deduct from the bank statement balance all the checks that you have issued and entered in your accounting record but have not been paid by the bank.

      Step 3 – Find and add credit memorandum to your accounting record: Bank issues a credit memorandum when it collects a note receivable on behalf of the depositor. Find if there is any credit memorandum issued by the bank that you have not entered in the accounting record.

      Add to your accounting record any credit memorandum not entered in your accounting record.

      Step 4 – Find and deduct debit memorandum from your accounting record: Bank provides various services to its depositors such as printing checks, processing NSF checks and collecting notes receivables etc. Bank deducts charges from depositor’s account for these services and intimates him or her about such deductions by issuing a debit memorandum. Find any debit memorandum not recorded in your accounting record.

      Deduct from your accounting record any debit memorandum issued by the bank but not entered in the accounting records.

      Step 5 – Are the adjusted balances equal? See whether adjusted balance of your accounting record is equal to the adjusted balance in your bank statement.

      Step 6 – Make appropriate journal entries: The final step in a bank reconciliation is to prepare appropriate journal entries for the items that you have not recorded yet in your accounting records.

       

    24. Question 24. What Are The Reasons Of Difference Between Bank Records And Depositor’s Accounting Record?

      Answer :

      Most of the time the balance on the monthly bank statement does not agree with the depositor’s accounting record. The usual reasons of this disagreement are explained below:

      Outstanding checks: Outstanding checks (also known as unpresented checks) are the checks that have been issued by the company to a person (a creditor, for example) but have not yet been presented for payment. The amount of these checks are recorded by the company but no entry is made by the bank before the end of the month.

      Deposit in transit: Deposit in transit means the cash received from a party has been recorded by the depositor but has not been entered by the bank in the bank statement. It usually occurs on the last day of the month.

      Credits for interest earned: Banks pay interest on some accounts. If this interest is credited in the depositor’s account without intimating to the depositor, the bank statement and the depositor’s record will not agree.

      Service charges: Banks provide various services to its customers and deduct service charges from their accounts. The depositors usually are not aware of such deductions. These charges create a difference of balance between bank statement and the depositor’s record.

      NSF Check: NSF stands for Not Sufficient Funds. When a customer deposits a check in his account, the bank immediately credits his account with the amount of the check. Sometime such checks are not honored because the person issuing the check does not have sufficient funds in his account. In such a situation, the bank reduces the balance of the customer. The dishonored check is returned to the depositor as NSF check.

    25. Question 25. Which Items On A Bank Reconciliation Will Require A Journal Entry?

      Answer :

      The items on the bank reconciliation that will require a journal entry are the items noted as "adjustments to books." These items did appear on the bank statement, but they did not appear on the company's books.

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