Bank Reconciliation Statement

Bank Reconciliation Statement

Multiple Choice

Cash Book is prepared by ........

• Bank

• Company

Multiple Choice

Pass Book is prepared by.............

• Company

• Bank

Multiple Choice

When Cash book Balance and Pass book balance differs, what is prepared?

• Bills of Exchange

• Bank Reconciliation Statement

Bank Reconciliation Statement

A Statement showing reasons of differences in Cash Book and Pass book.

Records only those transactions which are not recorded in any one book

Recorded in Cash book not recorded in Pass Book

• Cheque issued not yet presented /up to the date of BRS

• Cheque received not yet deposited/ up to the date of BRS

• Cheque deposited not yet cleared/ up to the date of BRS

• Amount under casted/over casted in cash book

Recorded in Pass book not recorded in Cash Book

• Bank Charges

• Bank interest

• Insurance premium/any other expense paid by bank

• Money collected by bank from customer(Bills of Exchange)

• Customer paid money directly to bank

• Amount wrongly debited/credited by Bank

Methods of preparing Bank Reconciliation Statement

Methods

• (1) Starts from Balance as per Cash book, ends to Balance as per Passbook

• (2) Starts from Balance as per Passbook, ends to Balance as per Cash book

(2) Starts from Balance as per Passbook, ends to Balance as per Cash book

we need to bring balance of passbook upto the amount of balance as per Cash book

e.g. Balance as per passbook is 80,000 and balance of cashbook is 70,000,

We need to bring 80,000 upto 70,000 by posting transactions

Transactions to be posted in Bank Reconciliation Statement (2) Method

• Remove all Passbook entries (posted in passbook not entered in cash book)

• Record all Cashbook entries ( posted in cashbook not entered in pasbook)