What causes a discrepancy between the bank balance shown in the Pass Book and the Cash Book?

Show Answers

Cheque issued but yet to be presented for paymentCheque issued but subsequently dishonouredCheque deposited and cleared by the bankBoth A and BNone of the above

Explanation

Differences between the bank balance recorded in the Pass Book and the Cash Book can occur for several reasons. For instance, when a cheque is issued (recorded as a credit in the Cash Book) but has not yet been presented to the bank for payment, the Pass Book will not reflect this transaction, causing a difference. Similarly, if a cheque is issued but later dishonoured, the Pass Book does not record this transaction, leading to a mismatch. However, when a cheque is deposited and credited by the bank, both the Cash Book and Pass Book record the entry, so no discrepancy arises. Therefore, options A and B together explain the reasons for the difference, making option D the correct choice.