The correct answer is Rs. 7,785Solution:Bank Reconciliation StatementParticularsPlus itemsMinus itemsDebit (Favourable) balance as per cash book7,340 Cheque deposited but not credited 345Cheque issued but not presented for payment790 Total8,130345Credit (favourable) balance as per passbook7,785 Explanation of Statements:Favourable balance as per cash book: This is the balance of the amount lying in the bank account as reflected by the company's cashbook. As it is a favourable balance, Rs. 7340 is shown in the plus items column. Cheques deposited but not credited: Since cheques have been paid into a bank, the entry for the same would have already been passed in the cash book. Its a receipt therefore Rs. 3450 should have been debited in the cash book. This will increase the balance in the cash book. But Bank balance has increased only by Rs. 3105 as cheques of Rs. 345 have not been collected yet by bank. To neutralise the overcast effect, the balance has to be decreased from the cash book which can be done by crediting the cashbook. Hence, the Rs. 345 should be subtracted by placing it in minus items Column Cheque issued but not presented for payment: Since cheques have been issued, the entry for the same would have been passed in the cash book. Its a payment therefore the amount should have credited in the cash book. This will decrease the balance in the cash book. Since, cheques of Rs. 790 have not been presented for payment, the balance has not actually decreased. To neutralise the undercast effect, the balance has to be increased in the cashbook which can be done by debiting the cashbook. Hence, the Rs. 790 should be added by placing it in Plus Column. By finding the difference between the totals of the Plus & Minus Column, we arrive at balance as per the Passbook which is Rs. 7,785. Confusion PointsDebit as per cash book is favourable that denotes deposit of amount but debit as per Passbook is unfavourable that denotes withdrawal from a bank account. Credit as per cash book is unfavourable that denotes amount withdrawn but credit as per Passbook is favourable that denotes deposit of amount in a bank account.