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What is Bank Reconciliation Statement? How to prepare it?

 

Bank Reconciliation Statement: It is a statement prepared by company to know the cause of difference between cash book bank column balance and bank pass book balance. It is prepared daily, monthly, yearly according to the requirement. With the help of this statement company can ascertain the differences by comparing one book balance with other book bank balance. If any transactions are omitted then it is written in book and if any transactions recorded wrongly by bank then it is informed by company on time or if  any transaction is recorded wrongly by company then it is corrected by company itself.

Bank Reconciliation statement format:

Bank Reconciliation Statement

As on ---------2021

Particulars

Amount

Amount

Debit balance as per cash book

 

---------

Add: Cheque issued but not presented for bank

----

 

Add: Interest, dividend collected by bank 

----

 

Add: Amount directly deposited in bank

----

 

Add: Amount wrongly credited in cash book

----

 

 

 

---------

Less: Directly payment made by bank

-----

 

Less: Cheque paid to bank for collection but not credited by bank

-----

 

Less: Interest charged by bank

-----

 

Less: Cheque issued but not recorded in cash book

-----

 

Less: Wrongly debited in cash book

-----

 

 

 

--------

Balance as per bank pass book

 

-----------

 

Example: Prepare bank reconciliation statement on 31st march 2020 with the help of given information:

·        Debit balance of cash book is Rs. 48,000

·        Cheque issued but not cleared in bank Rs. 15,000

·        Cheque deposited but not recorded in cash book of Rs. 4,500

·        Rs.1800 Amount wrongly credited in pass book.

·        Cheque deposited but not credited in bank of Rs. 2000

 

Solution:                                  Bank Reconciliation Statement

                                                    As on 31st march 2020

Particulars

Amount

(In Rs.)

Amount

(In Rs.)

Debit balance of cash book

 

48,000

Add: Cheque issued but not cleared in bank

15,000

 

Add: Cheque deposited but not recorded in cash book

4,500

 

Add: Amount wrongly credited in pass book.

1,800

 

 

 

21,300

Less: Cheque deposited but not credited in bank

(2,000)

(2,000)

Credit balance of pass book

 

19,300

 

Example: On 31st December 2020 book of Deepak enterprises cash book shows credit balance of Rs. 8,000. Bank balance of Deepak enterprises cash book and bank pass book shows different balances. So, to know the reason the management decided to prepare the bank reconciliation statement with the help of given information:

·        Rs. 12,000 directly deposited in bank

·        Cheque presented in bank for payment of Rs. 5000 but not recorded in cash book

·        Interest received by bank of Rs.1,200

·        Rs. 5,000 debited by bank instead of Rs. 7,000

·        Cheque issued for collection but not credited by bank Rs. 25,000

·        Bank charges of Rs. 800

Solution:                                      Bank Reconciliation statement

                                                          As on 31st December 2020

Particulars

Amount (+)

Amount (-)

Credit balance (Overdraft) of cash book

 

(8,000)

Amount directly deposited in bank

12,000

 

Cheque presented in bank for payment of Rs. 5000 but not recorded in cash book

 

(5,000)

Interest received by bank of Rs.1,200

1,200

 

Rs. 5,000 debited by bank instead of Rs. 7,000

2,000

 

Cheque issued for collection but not credited by bank Rs. 1,000

 

(1,000)

Bank charges of Rs. 800

 

(800)

Credit balance of Pass book

400

 

 

 


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