Professional Documents
Culture Documents
Group# 5
Class: Bs-IT19(B)
Acknowledgment:
First of all, I would like to thank my accounting professor, Sir Yasir
regards.
Table of content:
1. Dischonor of cheque
5. Methods of B.R.S
Dischonor of cheque
WHAT IS CHEQUE?
A cheque (or check) is a paper used to give money from one person or business to another
person or business. To the person getting the cheque, it is a paper that allows them to go to a
bank and get money. A cheque that is written to a person but does not have the amount of
money written is a blank cheque.
4. The check must have an order to pay a certain sum: The cheque should contain an order to
pay a certain sum of money only. If a cheque is drawn to do something in addition to, or other
than to pay money, it cannot be a cheque. For example, if a cheque contains ‘Pay USD 500 and
a TV worth USD 500 to A‘ it is not a cheque.
5. It should be signed by the drawer and should be dated: A cheque does not carry any validity
unless signed by the original drawer. It should be dated as well.
A cheque is said to be dishonoured or bounced when it is presented for payment to a bank but
t is not accepted because of some reason or the other.
REASON :-
1) Signature not matching
EXAMPLE:
the bank also keeps a record of our bank account with the bank statment" and enters into
our account everyday what is paid in and what is drawn out. At the end of any day, the bank
will gladly tell us our bank balance (as per bank record). So two reciprocal accounts are kept
Bank Account (Cash Book ) in books of the depositor and depositor's account in books of the
bank. The balances shown by the two accounts (Bank A/c and Depositor's A/c) should be
equal because when the Balance.
Cash Book means two bank columns on the both sides of two column or three column Cash
Book. It is made up everyday, and we record in it (Bank Columns) all cheques received
from our debtors and all cheques paid or issued to our creditors or suppliers. We shall also
have several contra cntries every month, recording excess cash paid in or cash drawn out
when required for personal or office use. At the end of the month the Cash Book (Bank
Column) is balanced and the result is a bank balance, (as per Cash Book ). Thus the Cash
Book (Bank Columns ) tells us, what is our balance with thc bank on a particular date.
Account is debited (Bank Column of Cash Book is debited), the depositor's A/c is
credited in the bank books and vice versa. In other words, for each transaction opposite
entries are made in two booics. So if the Cash Book (Ba. Column) shows a debit balance,
the depositor's account will show a credit balance and if the Cash Book shows a credit
balance (overdrawn) the depositor's account in bank books .11 show a debit balance
Due to timing:-
Cheque for 8400 sent for collection have not been cleard by the bank so far
Cheque issued but not yet presented for payment $5600.
There is a debit of $80 in the pass book for bank charges ,but recorded in the cash
book
Bank has credited $240 for interest in the pass book but these are not recorded in
the cash book.
A customer deposited $2000 direct in the bank but these were recorded only in the
pass book
On standing orders of alir azam ,the bank made the following payment by debitting
his accounts:-
o Clube fees $500
o Life insurance premium $2500 these were not recorded in the cash book.
Consider left hand as pass book and right hand as cash book
17280 11480
5,800
Bank reconcillation statement pass book balance
Question no#2
On 31st march 2019 pass book shows a debit balance of $10,000
Cheque amounting to 8000$ drawn on 25th march of which cheques of 3000$ were
chased within 31st march
Cheque paid in bank for collection amounted to 5000$ but cheques of $22800 wre
credited on 2nd apri 2019
Incidental charges $25 charged by the bank
Dividend collected by bank on our behalf $350
A cheque for $600 debitted I the cash book omitted to be banked
Balance 22825 15350
Definations:
Cash Book:
There are end number of transactions occur in the normal course of business,
where in receipt or payment is made in cash or cheque. To record these
transactions the entity uses cash book and contains all the details of the
receipts and disbursements that are recorded chronologically.
Pass Book:
A book issued by the bank to the account holder that records the deposits and withdrawals
is known as passbook. Receipts will be shown in the debit side while payments are entered in
credit side.Passbook is a book issued by the bank to the account holder which records the
amount deposited in/withdrawn from the respective account during a particular period is
tracked. It is a snapshot of customer’s account in the bank’s book. With the help of pass book,
banks inform their customer about the status of their account.
Distinctions
5. Its debit balance shows cash at 5. Its debit balance shows bank overdraft
bank and credit balance shows and credit balance shows cash at bank.
bank overdraft.
Example:
Enter the following transactions in the cash book and pass book:
Jan.
$
2005
5. Received a check from Mr. S and deposited into the bank. 16,000
Particular V/ Particular V/
Date L/F Bank Date L/F Bank
s N s N
1.1.0
Cash A/C C 80,000 3.1.05 Mr. N A/C 7 8,000
5
10.1.0
Rent A/C 9 10,000
5
Bank
14.1.0
Charges 11 400
5
A/C
17.1.0
Mr. Z A/C 13 3,000
5
68,600
68,600 68,600
Conclusion
The bank reconciliation statement is prepared that helps to reconcile the two books as a measure
of internal auditing. The statement also outlines the causes of non-agreement of cash book and
pass book.
Methods of B.R.S (Bank Reconciliation Statement)
There are two methods of preparing B.R.S
(To solve if cash book is given we will start from cash book and get result of pass book
and vice versa)
DrDr = add
Cr Cr =less
Dr Cr = less
Solution
Name of Account
As on 31-3-2013
Dr 20000
(+) un presented cheque
Dr =30000
Dr =15000
(-) bank charges Cr 1000
Dr =14000
(-)dishounerdcheque
Cr 5000
Dr =9000
Dr 10000
(+) dividened received by bank
Dr =19000
Dr =21000
Balance as per pass book Cr. RS=21000
(To solve we start with both balancesi.e pass book and cash book and at the end we will get
same result of both balances)
Solution
Name of Account
As on 31-3-2013
(-)Dr.10000
UnpresentedCheque Dr.10000
Adjusting Enteries:
Adjusting enteries are basically made at the end of accounting period. They are used to update
revenue and expense accounts to make sure that expenses are matched to the accounting
period.
Problem:
The following information were taken from the book of ABC CO, on Dec 31,2016.