What is the primary reason that Inter-Branch Adjustments (unreconciled entries) are specifically mandated to be reported under Schedule 5 (Other Liabilities and Provisions) or Schedule 11 (Other Assets) in a bank's Balance Sheet, rather than being directly offset against each other?

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Accounting · Bank Accounts

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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Correct answer

To adhere to the full disclosure principle and prevent the understatement of both the bank's total assets and total liabilities.

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Answer 1

Because Section 29 of the Banking Regulation Act, 1949 requires net reporting in the Profit and Loss Account.

Answer 2

Because these entries always represent contingent liabilities under Schedule 12.

Answer 3

To adhere to the full disclosure principle and prevent the understatement of both the bank's total assets and total liabilities.

Answer 4

To simplify the preparation of the final trial balance across all branches.

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