Presentation on Bank Reconciliation Statement

Submitted to Dr. L.M .Kathuria Submitted by-

A) Format of Bank Reconciliation statement when Debit balance as per cash book is taken as starting pointParticulars Dr. Balance (favorable balance) as per cash bookAdd:1. Cheque issued or drawn but not yet presented for payment. 2.Interest alowed by bank not recoded in cash book. 3.Amount directly deposited by customers in our bank acct. 4.Interest and dividends collected by bank on traders investment 5.Cheques paid into bank but omitted to be entered in cashbook 6.Any wrong credit given by bank in pass book. Less:1.Cheque paid into bank for collection but not yet credited by bank 2.Cheques paid into bank for collection but dishonored by bank 3.Direct payment made by bank acc. to the standing instructions of customers. 4.Bank charges and commission charged by bank. 5.cheques issued but omitted to be recorded in cashbook. 6.Any wrong debit given by bank in passbook. Cr. Balance (favorable balance) as per cash book +items (Rs.) *** *** *** *** *** *** *** *** *** *** *** *** *** -item (Rs.)

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Illustration prepare a Bank Reconciliation statement from following particulars on 31march,2002

i) debit balance as per bank column of cash book ii) cheques issued to creditors but not yet presented to bank iii) dividend received by bank,but not entered in cashbook iv) interest allowed by bank v) cheques deposited into bank for collection, but not collected by bank upti this date 15,400 vi) bank charges 200 vii) a cheque deposited into bank was dishonored ,but no intimation 320 viii) bank paid house tax on our behalf, but no informaton received from bank in this connection 350

Rs. 3,72,000 72,000 5,000 1,250

SolutionBank reconciliation statement as on 31st march,2002

Particulars
Plus Minus Items(Rs) Items (Rs) 3,72,000 72,000 5,000 1,250 15,400 200 320 350 16,270

Dr. Balance as per cash book Add: i) cheques issued bur not yet presented for payment ii) dividend received by bank, but not entered in cash book iii) interest allowed by bank ,not entered in cashbook Less:i) cheques deposited into bank but not collected by bank upto this date ii) bank charges,not entered in the cashbook iii) cheque deposited into bank ,but dishonored iv) payment of house tax by bank on our behalf, not entered in cash book. Cr. Balance a per cash book

4,50,250 4,33,980

B) When Credit balance (unfavorable balance) as per Cash book is Given

IF the Cash book shows a credit balance (overdraft) at start, the
overdraft balance will be written in minus column and there will be no change in column of all other items.

IllustrationOn december 31,2005, the cash book of mittal bros, showed an overdraft of rs. 6,92.from the foll. Particulars make out a Bank Reconciliation statement and ascertain the balance as per pass book.
i) Debited by bank for Rs. 200 on account of interst on overdraft and Rs. 50 on account of charges for collecting bills. ii) Cheques drawn but not cashed before Dcember 31,2005 for Rs.4000 iii) The bank has coolected interest and has credited Rs. 600 in Pass book. iv) A bill recievable for Rs.700 previously discounted with bank had been dishonored and debited in pass book. v) Cheques paid into bank but not collected and credited before december 31,2005 amounted to Rs. 6000.

SOLUTIONBank Reconciliation Statement as on 31st,2005

Particulars Plus items (Rs.) Minus items (Rs.) 6920 250 4,000 600 700 6,000 4,600 Overdraft (Debit) balance as per Pass Book 13,870 9,270

Cr. Balance (overdraft) as per cash book i) interest on overdraft and collection charges debited by the bank (Rs 200 + Rs 50) ii) Cheque deposited but not yet cedited by the bank iii) Another Cheque deposited but dishonored iv) Bill recievable discounted with bank is dishonored and debited in pass book v) Cheque paid into bank but not cleared

C) When Debit Balance (overdraft) as per pass book is given

IF Bank Reconciliation Statement is started by Debit(unfavorable or overdraft) balance of pass book ,the starting balance will be written in minus items and all items will be reversed i.e.items shown in plus will be written in minus column and items shown in minus will be written in plus column.

IllustrationOverdraft shown by pass book of Mr. Murli is Rs. 20,000.Prepare Bank Reconciliation Statement as on December 31,2005.
i) Bank cgarges debited as per pass book Rs. 500 ii) Cheques recorded in cash book but not sent to bank for collection Rs2500 iii) Received a payment directly from customer Rs 4,600 iv) Cheque issued but not presented for payment Rs 6,980 v) Interest credited by pass bok Rs 100 vi) LIC paid by bank Rs 2500 vii) Cheques deposited with bank but not collected Rs.3,500

SolutionBank Reconciliation Statement as on 31st,December,2005

Particulars Plus items (Rs) 500 2500 4,600 6,980 100 2500 3500 9000 Overdraft as per CASH BOOK 31680 22680 Minus items (Rs) 20,000

Overdraft as per Pass Book i) Bank charged debited by the bank. ii) Cheques debited in the cash book but not sent into bank for collection. iii) Direct deposit made by a customer. iv) Cheques issued but not presented for payment. v) Interest credited in pass book. vi) LIC payment made by bank. vii) Cheques deposited with bank but not yet collected.

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