NCERT · Class 11 · Accountancy · Bank Reconciliation StatementInterest allowed by the bank is:
Step-by-Step Solution
Interest allowed (credited) by the bank increases the balance in the passbook before it is recorded in the cash book.
Detailed Options Breakdown
Option : Credited in cash book first
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Bank Reconciliation Statement.
Option 1: Recorded in passbook as credit, increasing the passbook balance (Correct Answer)
Correct choice. Refer to the step-by-step verified solution guidelines above for details.
Option 2: Debited in passbook
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Bank Reconciliation Statement.
Option 3: Subtracted from passbook balance
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Bank Reconciliation Statement.
💡 Study Guide: This question tests core syllabus concepts from Bank Reconciliation Statement. For formulas, key summaries, and mock exam reference guides, read the full Bank Reconciliation Statement Revision Notes.