BRS

 Bank Reconciliation Statement (BRS)

The statement which is prepared for verifying or reconciling
the bank balances showing by the cash book and the
passbook on the certain day and incorporates the reason for
disagreement between them is called bank reconciliation
statement.

 Utility of BRS
 It gives an authentic proof of the accuracies of the
cashbook and passbook balances.
 The reconciliation statement will also indicate any undue
delay in the clearance of outstation cheques.
 Entries in both the books are automatically checked.
 It helps to detect any mistake in the cashbook or
passbook.
 Cashbook may be made up-to-date by recording some
unknown entries.
  Causes of difference in cashbook and passbook balance
A.) Difference caused by time gap in recording transaction

 Cheques issued but not yet presented for payment in

the bank.
 Cheques made into the banks for collection but not yet
credited by the bank.
 Cheques made into the bank for collection but
dishonoured.
 Interest allowed by the bank.
 Interest changed by the bank or overdraft.
 Bank charges on commission charged by the bank.
 Direct deposit by the customer in the bank.
 Interest and dividend collect by the bank on the behalf
of customers.
B.) Differences caused by errors committed in recording
transactions

 Errors committed in recording the transactions by the

firm.
I. Cheque issued to a creditor but omitted to be recorded in
the cashbook.
II. Cheque deposited to a bank but omitted to be recorded in
cashbook.
III. Error in totalling or balancing the bank column.

 Errors committed in recording transactions by the bank.