Bank Reconciliation Statement Bank Reconciliation Statement Bank reconciliation

Bank Reconciliation Statement

Bank Reconciliation Statement • Bank reconciliation statement is a statement that Account holder (depositors) prepare to find, explain and understand any differences between the balance in bank statement and the balance in their accounting records.

Bank Reconciliation Statement § Causes of Difference • Cheques issues to suppliers not yet presented for payment. • Cheques deposited to the bank for collection. • Cheques received by the bank directly not yet intimated. • Insurance premium paid by the bank as per standing instructions not yet intimated. • Dividend received by the bank directly. • Bank charges not yet intimated. • Cheques dishonoured but not yet intimated.

Bank Reconciliation Statement as on…………… Particulars A B Amount (Rs. ) Balance as per Cash Book Add: Cheques issued but not presented for payment Interest credited by bank but not recorded in cash book Debtors directly paid into bank but not recorded in cash book Wrongly credit by banker Collections by banker as per customer standing instructions C D *** *** *** Total B (Total A + B) Less: Cheques deposited but not credited by the bank Dishonoured cheques appeared in the pass book but not entered in the cash book Bank charges as per pass book Wrong debit by banker Payments as per standing instructions Total (D) Balance as per pass book (C- D) Amount (Rs. ) *** *** ***

Q. No 1 From the following particulars, prepare a Bank Reconciliation Statement for Jindal Offset Ltd. • Balance as per Cash Book is Rs. 2, 40, 000. • Cheques issued but not presented in the bank amounts to Rs. 1, 36, 000. • Cheques deposited in bank but not yet cleared amounts to Rs. 90, 000. • Bank charges amount to Rs. 300. • Interest credited by bank amounts to Rs. 1, 250. • The balance as per Pass Book if Rs. 2, 86, 950

Q. No 2 • From the following particulars of Mr. Vinod, prepare bank reconciliation statement as on March 31, 2010. 1. Bank balance as per cash book Rs. 50, 000. 2. Cheques issued but not presented for payment Rs. 6, 000. 3. The bank had directly collected dividend of Rs. 8, 000 and credited to bank account but was not entered in the cash book. 4. Bank charges of Rs. 400 were not entered in the cash book. 5. A cheques for Rs. 6, 000 was deposited but not collected by the bank.

Answer:

Q. No 3 • From the following particulars of Anil & Co. prepare a bank reconciliation statement as on August 31, 2010. 1. Balance as per the cash book Rs. 54, 000. 2. Rs. 100 bank incidental charges debited to Anil & Co. account, which is not recorded in cash book. 3. Cheques for Rs. 5, 400 is deposited in the bank but not yet collected by the bank. 4. A cheque for Rs. 20, 000 is issued by Anil & Co. not presented for payment.

Answer

4 5.

BRS – Method 2 (Pass Book Balance to Cash Book Balance) Q 1 • On 31 st March 2017, the Bank Pass Book of Namrata showed a balance of Rs. 1, 50, 000 to her credit while balance as per cash book was Rs. 1, 12, 050. On scrutiny of the two books, she ascertained the following causes of difference: • She has issued cheques amounting to Rs. 80, 000 out of which only Rs. 32, 000 were presented for payment. • She received a cheque of Rs. 5, 000 which she recorded in her cash book but forgot to deposit in the bank. • A cheque of Rs. 22, 000 deposited by her has not been cleared yet. • Mr. Gupta deposited an amount of Rs. 15, 700 in her bank which has not been recorded by her in Cash Book yet. • Bank has credit an interest of Rs. 1, 500 while charging Rs. 250 as bank charges. • Prepare Bank Reconciliation Statement.

BRS – Method 2 (Pass Book Balance to Cash Book Balance) Q 1 ANS Bank Reconciliation Statement as on 31 st March 2017 Particulars Amount (Rs. ) Balance as per Pass Book (Cr. ) Add: Cheque deposited but not yet cleared Add: Cheque recorded in Cash Book but not yet deposited Add: Bank Charges debited by Bank Less: Cheque issued but not yet presented Less: Amount deposited but not recorded in Cash Book 1, 50, 000 22, 000 5, 000 250 (48, 000) (15, 700) Less: Interest allowed by Bank Balance as per Cash Book (1, 500) 1, 12, 050

Method II: Pass Book Balance to Cash Book Balance Q 2 • Prepare Bank Reconciliation statement as on December 31, 2009. On this day the passbook of Mr. Himanshu showed a balance of Rs. 7, 000. (a) Cheques of Rs. 1, 000 directly deposited by a customer. (b) The bank has credited Mr. Himanshu for Rs. 700 as interest. (c) Cheques for Rs. 3000 were issued during the month of December but of these cheques for Rs. 1, 000 were not presented during the month of December. (d) Cheque deposited into bank but not cleared Rs. 2500

Method II: Pass Book Balance to Cash Book Balance Q 2 ANS Bank Reconciliation Statement as on 31 st March 2009 Particulars Balance as per Pass Book (Cr. ) Add: Cheque deposited but not yet cleared Less: Cheques issued but not presented for payment Less: Cheques directly deposited Less: Interest credited by the bank Balance as per Cash Book Amount (Rs. ) 7000 2500 9500 (1000) (700) 6800

Method II: Pass Book Balance to Cash Book Balance Q 3 • Mrs. Jame’s pass book showed a balance of Rs 25, 000 on June 30, 2003. Her cash book shows a different balance. On examination, it is found that 1. No record has been made in the cash book for a dishonour of a cheque for Rs. 250 2. Cheques paid into bank amounting to Rs. 3, 500 were paid into the bank on June 28, 2003 and the same had not been entered in the pass book. 3. Bank charges of Rs. 300 have not been entered in the cash book. 4. Cheques amounting to Rs. 9, 000 issued to Ms. Devi has not been presented for payment still. 5. Mr. Balu who owed Rs. 3, 000 has directly paid the sum into the bank account.

Method II: Pass Book Balance to Cash Book Balance Q 3 ANS Bank Reconciliation Statement as on 30 June, 2003 Particulars Balance as per Pass Book Add: Cheques paid into bank not collected Add: Dishnonour of Cheque not recorded in Cash Book Add: Bank Charges not entered in the Cash Book Amount (Rs. ) Less: Cheques issued but not presented for payment Less: Amount directly paid by Mr. Balu 25, 000 3500 250 300 29050 (9000) (3000) Balance as per Cash Book 17050

Method II: Pass Book Balance to Cash Book Balance Q 4 Prepare a bank reconciliation statement of Mr. Goutham from the following data as on 31. 12. 2003. Particulars Amount (Rs. ) Balance as per Pass Book Cheques issued but not presented for payment Cheques deposited in bank but not collected Bank paid insurance premium Direct Deposit by a Customer Interest on Investment collected by bank Bank charges 12600 900 1200 500 800 200 100 Balance as per Cash Book 12500

Method III: Overdraft Cash Book Balance to Overdraft Pass Book Balance Q 1 Prepare a Bank Reconciliation Statement as at June 30, 2018 for M/s. Jothi Sales Private Limited from the information given below Particulars Bank overdraft as per cash book Cheques issued on June 20, 2003 but not yet presented for payment Cheques deposited but not yet credited by bank Bills receivable directly collected by bank Interest on overdraft debited by bank Amount wrongly debited by bank Amount (Rs. ) 1, 10, 450 15, 000 22750 47200 12115 2400

Method III: Overdraft Cash Book Balance to Overdraft Pass Book Balance Q 1 ANS

Method III: Overdraft Cash Book Balance to Overdraft Pass Book Balance Q 2 From the following particulars, ascertain the balance that would appear in the Bank Pass Book of Cotton World Ltd. at 31 st December, 2018. a) The bank overdraft as per Cash Book on 31 st December, Rs. 1, 26, 800. b) Interest on overdraft for 6 months ending 31 st December, Rs. 3, 200 is entered in the Pass Book. c) Bank charges of Rs. 600 for the above period are debited in the Pass Book. d) Cheques issued but not cashed prior to 31 st December, amounted to Rs. 23, 360 e) Cheques paid into bank but not cleared before 31 st December, were for Rs. 43, 400. f) Interest on investments collected by the bank and credited in the Pass Book, Rs. 24, 000.

Method III: Overdraft Cash Book Balance to Overdraft Pass Book Balance Q 2 ANS Bank Reconciliation Statement as on 31 st December, 2018 Particulars Bank overdraft as per Cash Book Add: Interest on overdraft Add: Cheques paid into bank but not cleared Add: Bank Charges not entered in the Cash Book Less: Cheques issued but not cashed Less: Interest on investments collected by the bank and credited Bank Overdraft as per Pass Book Amount (Rs. ) 1, 26, 800 3, 200 43, 400 600 23, 360 24, 000 47, 200 174000 47360 126640

Method III: Overdraft Cash Book Balance to Overdraft Pass Book Balance Q 3 • On 30 th June 2014, the Cash Book of a trader shows a bank overdraft of Rs. 2, 500. Following information's are available: 1. Cheques amounting to Rs. 14, 600 had been paid to the bank, but of these only Rs. 12, 200 were credited in the Pass Book, up to 30 th June, 2014. 2. He had also issued cheques amounting to Rs. 10, 000, out of which only Rs. 6, 400 had been presented for payment. 3. A cheque of Rs. 500 which he had debited to the bank account was not sent to bank for collection by mistake. 4. There is a debit in the Pass Book of Rs. 10 for Bank Charges and Rs. 50 for interest. 5. A customer directly paid into his bank Rs. 1, 000, but it was not shown in the Cash Book. 6. Bank has paid insurance premium of Rs. 400 according to his instructions, but this is not recorded in the Cash Book. Prepare a Bank Reconciliation Statement.

Method III: Overdraft Cash Book Balance to Overdraft Pass Book Balance Q 3 ANS Bank Reconciliation Statement as on 30 th June, 2014 Particulars Amount (Rs. ) Bank overdraft as per Cash Book Add: Cheques paid into bank but not cleared (14, 600 -12, 200) Add: Bank Charges Add: Bank Interest Add: Cheque not sent to bank for collection Add: Insurance Premium paid by bank 2, 400 10 50 500 400 Less: Cheques issued but not cashed (10000 -6, 400) Less: Amount Directly deposited by Customer 3, 600 1, 000 Bank Overdraft as per Pass Book Amount (Rs. ) 2, 500 3, 360 5, 860 4, 600 1, 260

Method IV: Overdraft Pass Book Balance to Overdraft Cash Book Balance Q 1 The Pass Book of M/s. EL Enterprises showed that he had an Overdraft of Rs. 8, 000 on 31 st October, 2018. On verification of the Cash Book and the Bank Pass Book the following points were noticed: a) Cheques worth Rs. 1, 400 paid into the Bank had not been collected till 31 st October b) Cheques worth Rs. 720 issued before 31 st October had not been presented for payment. c) Interest on Overdraft Rs. 110 charged by the Bank was not entered in the Cash Book d) A Bill Receivable worth Rs. 800 discounted on 1 st September was dishonoured e) A customer had paid into the Bank directly Rs. 450 and this was not entered in the Cash Book.

Method IV: Overdraft Pass Book Balance to Overdraft Cash Book Balance Q 1 ANS Bank Reconciliation Statement as on 31 st October, 2018 Particulars Bank overdraft as per Pass Book Add: Cheques issued but not presented for payment Add: Customer paid directly to the Bank Add: Bills discounted is dishonored Less: Cheques paid into bank but not cleared Less: Interest on Overdraft Bank overdraft as per Cash Book Amount (Rs. ) 8000 720 450 800 1400 110 1970 9970 1510 8460

Method IV: Overdraft Pass Book Balance to Overdraft Cash Book Balance Q 2 My bank Pass Book showed an overdraft of Rs. 8, 500 on 31 st March, 2017. This does not agree with the Cash Book balance. From the following particulars ascertain the Cash Book balance: - • Cheques amounting to Rs. 15, 000 were paid into bank in March, out of which, it appears, only cheques amounting to Rs. 4, 500 were credited by bank. • Cheques issued during March amounted in all to Rs. 11, 000. Out of these cheques for Rs. 3, 000 were unpaid on 31 st March, 2017. • The Pass Book stands debited with Rs. 150 for interest and with Rs. 30 for bank charges. • The bank had paid the annual subscription of Rs. 100 to my club according to my instructions. • The entries for interest, bank charges and subscription have not yet been made in Cash Book.

Method IV: Overdraft Pass Book Balance to Overdraft Cash Book Balance Q 2 ANS Bank Reconciliation Statement as on 31 st March, 2017 Particulars Bank overdraft as per Pass Book Add: Cheques issued but not presented for payment Less: Cheques deposited but not credited Less: Bank Charges interest Less: Bank Charges Less: Club Subscription paid by Bank overdraft as per Cash Book Amount (Rs. ) 3000 10500 150 30 100 Amount (Rs. ) 8500 3000 11500 10780 720

Method IV: Overdraft Pass Book Balance to Overdraft Cash Book Balance Q 3 • Prepare the Bank Reconciliation Statement from the following particulars for the period ending 31 st December, 2012. (a) Overdraft as per Pass Book on 31 -12 -2012 Rs. 7, 600. (b) Cheques deposited but not collected by the bank Rs. 3, 560. (c) Incidental charges not recorded in Cash Book Rs. 80. (d) Cheques were issued for Rs. 7, 800 but only Rs. 4, 400 were presented for payment. (e) Insurance premium paid by bank not recorded in the Cash Book Rs. 4, 200. (f) On 31 st December, 2012 cash was deposited in bank Rs. 385 but the cashier debited the bank column with Rs. 485 by mistake.

Method IV: Overdraft Pass Book Balance to Overdraft Cash Book Balance Q 3 ANS Bank Reconciliation Statement as on 31 st December, 2012 Particulars Amount (Rs. ) Bank overdraft as per Pass Book Add: Cheques issued but not presented for payment 3400 Less: Cheques deposited but not credited Less: Incidental Charges paid by Bank Less: Insurance premium paid by Bank Less: Amount wrongly entered in Cash Book (485 -385) 3, 560 80 4, 200 100 Bank overdraft as per Cash Book Amount (Rs. ) 7, 600 3, 400 11000 7940 3060

Method IV: Overdraft Pass Book Balance to Overdraft Cash Book Balance Q 4 • Prepare a Bank Reconciliation Statement from the following particulars: On 31 st December 2014, I had an overdraft of Rs. 750 as shown by my Pass Book. • I had issued cheques amounting to Rs. 250 of which Rs. 200 worth only seem to have been presented for payment. • Cheques amounting to Rs. 100 had been paid in by me on 30 th December, but of these only Rs. 75 were credited in the Pass Book. • I also find that a cheque for Rs. 10 which I had debited to bank account in my books has been omitted to be banked. • There is a debit of Rs. 25 in my Pass Book for interest. An entry of Rs. 30 of a payment by a customer direct into the bank appears in the Pass Book. • My Pass Book also shows a credit of Rs. 60 to my account for interest on investments directly collected by my bankers.

Method IV: Overdraft Pass Book Balance to Overdraft Cash Book Balance Q 4 ANS Bank Reconciliation Statement as on 31 st December, 2014 Particulars Bank overdraft as per Pass Book Add: Cheque issued but not presented for payment Amount (Rs. ) 750 Add: Interest on Investment 50 30 60 Less: Cheque deposited but not credited Less: Cheque recorded in cash book but not sent to bank Less: Interest charged by Bank 25 10 25 Add: Amount Deposited by Customer Bank overdraft as per Cash Book Amount (Rs. ) 140 890 60 830