Bank Reconciliation
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Bank Reconciliation Statement. Prepared by:- Chahat singla . Cash book. Cash book with bank column only. Particulars . Date . Rs . Date. Particulars . Rs . Payments. Receipts. Pass book. Pass book. Receipts. Payments. Defination :-.

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Bank Reconciliation Statement

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Bank reconciliation statement

Bank Reconciliation

Statement

  • Prepared by:-

  • Chahat singla


Bank reconciliation statement

Cash book


Bank reconciliation statement

Cash book with bank column only

Particulars

Date

Rs .

Date

Particulars

Rs .

Payments

Receipts


Bank reconciliation statement

Pass book


Bank reconciliation statement

Pass book

Receipts

Payments


Bank reconciliation statement

Defination:-

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


Bank reconciliation statement

BANK

Depositor’s records

Bank’s books

Beginning balance Rs. 10000BeginningbalanceRs. 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


Bank reconciliation statement

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


Bank reconciliation statement

process

Deposit in bank

Bank

Chequerecieved

Entered in pass book

1


Bank reconciliation statement

  • 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


Bank reconciliation statement

  • 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


Bank reconciliation statement

  • 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


Bank reconciliation statement

  • 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


Bank reconciliation statement

  • 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


Bank reconciliation statement

  • 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


Bank reconciliation statement

  • 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


Bank reconciliation statement

  • 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


Bank reconciliation statement

  • 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


Bank reconciliation statement

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


Bank reconciliation statement

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


Bank reconciliation statement

Four types of balances :-

1. Favourable cash book

2. Unfavourable cash book

3. Favourable pass book

4. Unfavourable pass book


Bank reconciliation statement

  • 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


Bank reconciliation statement

  • 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


Bank reconciliation statement

The End


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