Bank Reconciliation Statement

1. Bank Reconciliation Statement • Prepared by:- • Chahat singla

2. Cash book

3. Cash book with bank column only Particulars Date Rs . Date Particulars Rs . Payments Receipts

4. Pass book

5. Pass book Receipts Payments

6. Defination:- Bank reconciliation statement is a statement that makes to reconcile the balances of cash book and pass book.

7. BANK Depositor’s records Bank’s books Beginning balance Rs. 10000Beginningbalance Rs. 10000 Chequedeposit Rs. 1000 balance Rs. 10000 balance Rs. 11000 The difference is Of Rs. 1000 Cheque deposited but not Cr. By bank Of Rs. 1000

8. Reasons for the difference in the balances of cash book and pass book • 1.Cheques deposited but not yet collected e.g.:- A cheque is deposited but not collected by bank of Rs. 1000 cash book - + pass book + - 0 0 0 0 1000 1000 1000 1000 0 0 In above example Rs. 1000 more in cash book

9. process Deposit in bank Bank Chequerecieved Entered in pass book 1

10. 2.Cheques issued but not yet presented • For payment e.g.:- A cheque is issued to Ram but not presented for payment of Rs. 1000 cash book - - pass book + + 1000 1000 0 1000 0 1000 1000 1000 1000 1000 In above example Rs. 1000 less in cash book

11. 3.Bank charges debited by bank only e.g.:- The bank has debited the pass book with bank charges Rs. 1000 - pass book + cash book - + 1000 1000 1000 0 0 1000 1000 1000 1000 1000 In above example Rs. 1000 more in cash book

12. 4.Interest credited by bank only e.g.:- The bank has credited the pass book with interest Rs. 1000 cash book - + - pass book + 0 0 0 1000 1000 0 0 1000 1000 In above example Rs. 1000 less in cash book

13. 5.Direct deposit by customers in bank e.g.:- • 5.Direct deposit by customers in bank of Rs. 1000 cash book - - pass book + + 0 0 0 1000 1000 0 0 1000 1000 In above example Rs. 1000 less in cash book

14. 6.Direct collections by bank e.g.:- • 5.Direct collections by bank of Rs. 1000 - pass book + cash book - + 0 1000 0 0 1000 1000 1000 0 0 In above example Rs. 1000 less in cash book

15. 7. Direct payments by bank e.g.:- • 5.Direct payments by bank of Rs. 1000 cash book - - pass book + + 1000 0 1000 1000 1000 0 1000 1000 1000 1000 In above example Rs. 1000 more in cash book

16. 8. Dishonour of cheques e.g.:- A cheque is deposited has been dishonoured by bank of Rs. 1000 pass book + cash book - - + 0 0 0 0 1000 1000 0 0 1000 1000 In above example Rs. 1000 more in cash book

17. 9. Retiring a bill under rebate by the bank e.g.:- The bank retired the bills of Rs. 1000 under a rebate of 100 + pass book cash book - - + 900 1000 1000 1000 0 100 1000 1000 1000 1000 In above example Rs. 100 less in cash book

18. 10. Errors and omissions in cash book and pass book e.g.:- error in CB There is a +ve balance of Rs. 1000 in CB and PB on 1st , Aug but on 3rd , Aug we write 100 in CB by mistake 1st ,Aug 1st ,Aug + pass book - cash book - + 0 1000 1000 0 1000 1000 1000 1000 1000 1000

19. 3rd ,Aug 3rd ,Aug + pass book cash book - - + 0 1000 100 0 1000 100 1000 1000 100 100 In above example Rs. 900 less in cash book e.g.:- omission in CB There is a +ve balance of Rs. 1000 in CB and PB on 1st , Aug but on 3rd , Aug we omitted to write in CB by mistake

20. 1st ,Aug 1st ,Aug + cash book - pass book s - + 1000 0 0 1000 1000 1000 1000 1000 1000 1000 3rd ,Aug 3rd ,Aug + cash book pass book + - - 0 0 0 1000 0 1000 0 1000 0 1000 In above example Rs. 1000 less in cash book

21. Four types of balances :- 1. Favourable cash book 2. Unfavourable cash book 3. Favourable pass book 4. Unfavourable pass book

22. 1.When favourable balance of cash book is given Example 1: On December 31 1991 the balance of the cash at bank as shown by the cash book of a trader was Rs1,401 On checking the bank statement with the cash book it was found that a cheque for Rs116 paid in on the 31st December was not credited until the 1st January, 1992 and the following cheques drawn prior to 31 December were not presented at the bank for payment until the 5th January 1992. Rashid & Sons Rs29, Bashir & Co Rs801, MA Jalil Rs6, Khalid Bros., Rs132.Prepare a statement recording the two balances: • Solution: • Bank Reconciliation Statement on 31stDecember 1991 PARTICULARS DETAIL AMOUNT Balance as per cash book [dr.] 1401 29 801 6 132 ADD Cheque issued but not dr. RS . ,BC. , MA. , KB. , 968 2369 116 LESS 116 Cheque deposit but not cr. Balance as per pass book cr. 2253

23. 2.When favourable balance of pass book is given Example 2: On December 31 1991 the balance as shown by the bank statement was 2,253.On checking the bank statement with the cash book it was found that a cheque for Rs116 paid in on the 31st December was not credited until the 1st January, 1992 and the following cheques drawn prior to 31 December were not presented at the bank for payment until the 5th January 1992. Rashid & Sons Rs29, Bashir & Co Rs801, MA Jalil Rs6, Khalid Bros., Rs132.Prepare a statement recording the two balances: • Solution: • Bank Reconciliation Statement on 31stDecember 1991 PARTICULARS DETAIL AMOUNT Balance as per pass book [cr.] 2253 116 ADD Cheque deposit but not cr. 116 LESS Cheque issued but not dr. 29 801 6 132 RS . ,BC. , MA. , KB. , 968 Balance as per cash book dr. 1401

24. The End