(a) On Ashad 2081, Bank Statement disclosed a balance of Rs.16,000 and Cash Book showed the balance of Rs.14,800 i) Deposit in transit Rs. 1,900 ii) Outstanding cheques Rs. 1,000. iii) Notes…

(a) On Ashad 2081, Bank Statement disclosed a balance of Rs.16,000 and Cash Book showed the balance of Rs.14,800 i) Deposit in transit Rs. 1,900 ii) Outstanding cheques Rs. 1,000. iii) Notes receivable and interest collected by the bank Rs.4,000 and Rs. 200 respectively. iv) Cheque of Rs. 7,450 deposited by the company was recorded by the bank as Rs.7,350 v) A customer's cheque for Rs.1,500 was returned by the bank due to insufficient fund. vi) A cheque for Rs. 7,800 paid by the bank was recorded as Rs. 7,600 by the company. vii) Bank charge Rs.300 for the service provided by the bank. Required: Bank Reconciliation Statement b. Write down the meaning of bad debts. Also explain in brief the methods of estimating bad debts.