Procedure of Preparing Bank Reconciliation Statement
A reconciliation statement is prepared when an account holder gets the duly completed pass book from the bank.Immediately on receiving the pass book, he tallies the bank balance shown by the cash book with the balances shown by the pass book and,in case of any difference,items appearing in the pass book are checked and ticked with the items appearing in the cash book are checked and ticked with the items appearing in the cash book.Unticked items in both the books will the help of these causes of difference,a statement of reconciliation will be prepared.
A Bank Reconciliation Statement can be prepared by taking the balance either as per cash book or as per pass book as a starting point.If the statement is started with the balances as per pass book column of the cash book,the answer arrived at in the end will be the balances as per pass book.Alternatively,if the statement is started with the balances as per pass book,the answer arrived at in the end will be the balances s per cash book.
The balances as per cash book may be either debit or credit and similarly the balances as per pass book may also be either debit or credit:-
1.(a)Dr. Balance as per cash book indicates that the trader has so much balances of deposit at the bank.
(b)Cr. Balance as per cash book indicates the amount which has been withdrawn in excess of the deposits.Credit balance as per cash book is also called 'Overdraft Balance as per Cash Book'
2.(a)Cr. Balance as per pass book indicates that the trader has so much balance of deposit at the bank.
(b)Dr. Balance as per pass book indicates the amount which has been withdrawn in excess of the deposit.Debit Balance as per pass book is also called 'Overdraft as per Pass Book'.
A reconciliation statement is prepared when an account holder gets the duly completed pass book from the bank.Immediately on receiving the pass book, he tallies the bank balance shown by the cash book with the balances shown by the pass book and,in case of any difference,items appearing in the pass book are checked and ticked with the items appearing in the cash book are checked and ticked with the items appearing in the cash book.Unticked items in both the books will the help of these causes of difference,a statement of reconciliation will be prepared.
A Bank Reconciliation Statement can be prepared by taking the balance either as per cash book or as per pass book as a starting point.If the statement is started with the balances as per pass book column of the cash book,the answer arrived at in the end will be the balances as per pass book.Alternatively,if the statement is started with the balances as per pass book,the answer arrived at in the end will be the balances s per cash book.
The balances as per cash book may be either debit or credit and similarly the balances as per pass book may also be either debit or credit:-
1.(a)Dr. Balance as per cash book indicates that the trader has so much balances of deposit at the bank.
(b)Cr. Balance as per cash book indicates the amount which has been withdrawn in excess of the deposits.Credit balance as per cash book is also called 'Overdraft Balance as per Cash Book'
2.(a)Cr. Balance as per pass book indicates that the trader has so much balance of deposit at the bank.
(b)Dr. Balance as per pass book indicates the amount which has been withdrawn in excess of the deposit.Debit Balance as per pass book is also called 'Overdraft as per Pass Book'.
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