bank reconciliation statement, preparation of bank reconciliation statement, bank reconciliation statement format, checking account, bank reconciliation statement meaning, bank reconciliation meaning, how to prepare bank reconciliation statement, Preparation of Bank Reconciliation Statement (BRS)
Every businessman who opens a current account with Bank is given a Pass Book which is a record of the businessman's Account in the books of the Bank. Entries in Pass Book are made by bank. The credit side of pass book indicates the amounts deposited in the Bank and debit side shows the amount withdrawn therefrom. The businessman who opens a current account with Bank also writes his transactions with the bank either in a bank account opened in the ledger or in the bank column of his columnar Cash Book. The deposits in the bank are entered on the debit side and payments from bank are entered on the credit side of the cash book. When deposits are more than withdrawals, then it is called Favourable Balance. When withdrawals are more than deposits, the there is a Bank Overdraft. In case of Favourable balance, the cash book shows debit balance and Pass Book credit balance. In case of Overdraft, the cash book shows credit balance and the pass book debit balance.
The balance shown by the two books cash book and passbook should be equal if all entries have been correctly and fully recorded in the two books. But in actual practice, these two balances may bot be the same as on a particular date. A statement know as 'Bank Reconciliation Statement' is therefore usually prepared every month for reconciling the balances shown by cash book and pass book as on a particular date.
The difference may arise on account of the following reasons.
1. Cheques issued but not yet presented for payment.
2. Cheques paid into bank, but not yet collected by the bank.
3. Interests on investments, dividends credited in pass book, not entered in cash book.
4. Bank charges, interest on overdraft, insurance premium etc. paid by bank understanding instructions debited in pass book, but not adjusted in cash book.
5. Amount directly deposited by customers in trader's bank account.
6. Cheques issued but not recorded in cash book.
7. Cheques deposited but not entered in cash book.
8. Errors in cash book or pass book.
bank reconciliation statement, preparation of bank reconciliation statement, bank reconciliation statement format, checking account, bank reconciliation statement meaning, bank reconciliation meaning, how to prepare bank reconciliation statement, Preparation of Bank Reconciliation Statement (BRS)
Every businessman who opens a current account with Bank is given a Pass Book which is a record of the businessman's Account in the books of the Bank. Entries in Pass Book are made by bank. The credit side of pass book indicates the amounts deposited in the Bank and debit side shows the amount withdrawn therefrom. The businessman who opens a current account with Bank also writes his transactions with the bank either in a bank account opened in the ledger or in the bank column of his columnar Cash Book. The deposits in the bank are entered on the debit side and payments from bank are entered on the credit side of the cash book. When deposits are more than withdrawals, then it is called Favourable Balance. When withdrawals are more than deposits, the there is a Bank Overdraft. In case of Favourable balance, the cash book shows debit balance and Pass Book credit balance. In case of Overdraft, the cash book shows credit balance and the pass book debit balance.
The balance shown by the two books cash book and passbook should be equal if all entries have been correctly and fully recorded in the two books. But in actual practice, these two balances may bot be the same as on a particular date. A statement know as 'Bank Reconciliation Statement' is therefore usually prepared every month for reconciling the balances shown by cash book and pass book as on a particular date.
The difference may arise on account of the following reasons.
1. Cheques issued but not yet presented for payment.
2. Cheques paid into bank, but not yet collected by the bank.
3. Interests on investments, dividends credited in pass book, not entered in cash book.
4. Bank charges, interest on overdraft, insurance premium etc. paid by bank understanding instructions debited in pass book, but not adjusted in cash book.
5. Amount directly deposited by customers in trader's bank account.
6. Cheques issued but not recorded in cash book.
7. Cheques deposited but not entered in cash book.
8. Errors in cash book or pass book.
bank reconciliation statement, preparation of bank reconciliation statement, bank reconciliation statement format, checking account, bank reconciliation statement meaning, bank reconciliation meaning, how to prepare bank reconciliation statement, Preparation of Bank Reconciliation Statement (BRS)
