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BANK RECONCILIATION STATEMENT

BANK RECONCILIATION STATEMENT. Takshila Learning Learn anything anywhere Visit: http :// www.takshilalearning.com Call: +91-8800999280. Meaning & Concept. Statement prepared by the Business entity, Reconciling/Matching the bank balance as per the cash book(Bank Column) & the Pass book.

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BANK RECONCILIATION STATEMENT

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  1. BANK RECONCILIATION STATEMENT Takshila Learning Learn anything anywhere Visit: http://www.takshilalearning.com Call: +91-8800999280

  2. Meaning & Concept Statement prepared by the Business entity, Reconciling/Matching the bank balance as per the cash book(Bank Column) & the Pass book. find out the differences between the balances & nullify them BRS is prepared by the business entity

  3. Cash V/s Pass Book The Cash Book is prepared by the business entity Pass book/Bank Statement is prepared by the bank to have a record of the customer’s banking transactions.

  4. BRS • BRS is not the part of the Accounting process/financial statements. • It is prepared at a particular date as a part of cash book • not mandatory to be prepared, voluntary for matching the balances of both books

  5. Importance Bring out errors in Cash book/Pass book Detection of Undue delay by the bank Discourages any manipulation by Accountant Finding out actual position of bank balance

  6. Reasons of Differences • Timing differences : Differences due to different treatments in Cash & Pass book. (on different dates) • Other differences : Difference due to errors in Cash book.

  7. Examples of Timing Differences Cheque deposited but not cleared Cheque issued but not presented for payment Bank Charges/Interest debited/credited in bank account. Direct payment/receipt by bank

  8. Other Differences • Transaction not recorded/twice recorded in cash book. • Any other clerical mistake( wrong amount, wrong casting, etc) in cash book.

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