When balance as per cash book …

Hi Achal, Answer will be Option C i.e. Substract Rs. 3500 Explanation: Balance as per Cash Book on 31st March is the starting point and we need to reach the balance as per passbook on 31st march 2021. Simple rule is to think of whether the target book is on the higher side or lower side due to this difference and then proceed with the adjustement. When a cheque is deposited into the bank, business will immediately increase the bank section of the cash book however for the amount to actually get added in the bank balance will actually take some time. It means bank balance as per cash book and bank balance as per pass book can vary. In the given case, 5000 was deposited - means bank balance as per cash book was increased immediately in the month of March. However, actual balance increased as per passbook is only Rs.1500 which was credited in March. Rs. 2000 credited in April but this we will not come to know in 31st march Bank Statement, this will appear in April Bank statement. Hence, this will be a reason of difference as well on 31st March. Balance 1500 yet to be collected by bank. These 2 things signifies that on 31st March Bank balance as per passbook was lower by Rs.3500 and bank balance as per cash book was higher by Rs. 3500. As mentioned in previous, for adjustment - we need to think whether the target book is on higher side or lower side. Here, the target book i.e. Passbook is on lower side. Hence, we need to reduce the cash book amount by Rs.3500 to arrive at balance as per passbook on 31st March. Hope this clarifies. Regards CA Ankit Agarwal