DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name of the Participant : M. Ramakrishna
Designation : Head of Section
Branch : Commercial & Computer Practice
Institute : Govt. Polytechnic for women,
Bheemunipatnam
Year/Semester : I Year
Subject : Accountancy-I
Sub-code : CCP-102
Topic : Bank Reconciliation Statement
Sub Topic : Preparation of Bank Reconciliation
Statement
Duration : 50 Minutes
Teaching aids : Power Point Presentation

CCP102.82 1
Objectives

On completion of this period, you would be able

to:

 Prepare Bank Reconciliation Statement

 Know causes for disagreement of Cash Book and Pass

Book balances
 Analyze the causes
 Compare the entries
 Adjust the entries in Bank Reconciliation Statement
CCP102.82 2
 Recap

In the last class, we discussed about

Preparation of Bank Reconciliation Statement
 Causes of disagreement between cash book
and pass book balance
 Comparison of balances
 Reconciliation of balances

CCP102.82 3
 Exercise
 Balance as per pass book Rs.6,380 as on 31-12-
07
 Cheques deposited Rs.2,356/- were not
collected before 31-12-07
 Cheque issued on 28-12-07 for Rs.1,200/- has
not yet cashed
 Rs.40/- has been credited in the pass book on
31-12-07 but not recorded in cash book
 Amount debited by bank in error Rs.100/-
 Dividend collected and credited in pass book is
Rs.80/-
 Insurance premium paid by bank is Rs.86/-
 A bill of Rs.600/- discounted in our bank, has
now been dishonoured and debited in pass book
CCP102.82 4
Cheques deposited Rs.2,356, were
not collected before 31-12-07

 Cheques deposited Rs.2,356/-

 Trader debits cash book
 Banker credits pass book
 only after collection

CCP102.82 5
On comparison of balances
as on 31-12-07

 Cash book shows higher balance

 Pass book shows lower balance

CCP102.82 6
To reconcile the balances in
Bank Reconciliation Statement
as per pass book balance

 Add

CCP102.82 7
Bank Reconciliation Statement as on
31-12-2007

Particulars Amount Amount

Rs. Rs.
Balance as per pass book as on 2,356 6,380
31-12-07
Add: 1. Cheques deposited, but
not credited

Less:

CCP102.82 8
Cheques issued on 28-12-07 for
Rs.1,200/- has not cashed

 Cheques issued on 28-12-07 for Rs.1,200/-

 Trader credits cash book
 But not presented for payment

CCP102.82 9
On comparison of balances
as on 31-12-07

 Cash book shows lower balance

 Pass book shows higher balance

CCP102.82 10
To reconcile the balances in
Bank Reconciliation Statement as per
pass book balance

 Less

CCP102.82 11
Bank Reconciliation Statement as on
31-12-2007
Particulars Amount Amount
Rs Rs.
Balance as per pass book as on 6,380
31-12-07
Add: 1. Cheques deposited, but 2,356
not credited

Less: 1. Cheques issued but not 1,200

presented for payment

CCP102.82 12
Interest Rs.40/- has been credited in
pass book as on 31-12-07 but not
recorded in cash book

 Interest Rs. 40/- credited in pass book

 But no entry in cash book

CCP102.82 13
On comparison of balances
as on 31-12-07

 Pass book shows higher balance

 Cash book shows lower balance

CCP102.82 14
To reconcile the balances in
Bank Reconciliation Statement as per

pass book balance

 Less

CCP102.82 15
Bank Reconciliation Statement as on
31-12-2007
Particulars Amount Amount
Rs. Rs

Balance as per pass book as on 31- 6,380

12-07
Add: 1. Cheques deposited, but not 2,356
credited

Less: 1. Cheques issued but not 1,200

presented for payment
2. Interest credited in pass
40
book only

CCP102.82 16
Amount debited by bank in error
Rs.100/-
 Amount debited in pass book
 By mistake

CCP102.82 17
On comparison of balances
as on 31-12-07

 Pass book shows lower balance

 Cash book shows higher balance

CCP102.82 18
To reconcile the balances in
Bank Reconciliation Statement as
per pass book balance

 Add

CCP102.82 19
Bank Reconciliation Statement as on
31-12-2007
Particulars Amount Amount
Rs Rs.
Balance as per pass book as on 31-12- 6,380
07
Add: 1. Cheques deposited, but not 2,356
credited
2. Amount debited by bank in 100
error

Less: 1. Cheques issued but not

presented for payment 1,200
2. Interest credited in pass book 40

CCP102.82 20
Dividend collected by bank Rs.80/-

 Rs.80/- dividend collected

 Banker credits pass book
 But no entry in cash book

CCP102.82 21
On comparison of balances
as on 31-12-07

 Pass book shows higher balance

 Cash book shows lower balance

CCP102.82 22
To reconcile the balances in
Bank Reconciliation Statement as
per pass book balance

 Less

CCP102.82 23
Bank Reconciliation Statement as on
31-12-2007
Particulars Amount Amount
Rs. Rs.
Balance as per pass book as on 31-12-07 6,380
Add: 1. Cheques deposited, but not 2,356
credited
2. Amount debited by bank in error 100
Less: 1. Cheques issued but not
presented for payment 1,200
2. Interest credited in pass book 40
3. Dividends credited in pass book 80
only

CCP102.82 24
Insurance premium paid by bank
Rs.86/-
 Insurance premium paid by bank Rs.86/-
 Banker debits cash book
 But not entered in cash book

CCP102.82 25
On comparison of balances
as on 31-12-07

 Pass book shows lower balance

 Cash book shows higher balance

CCP102.82 26
To reconcile the balances in
Bank Reconciliation Statement as per
pass book balance

 Add

CCP102.82 27
Bank Reconciliation Statement as on
31-12-2007
Particulars Amount Amount
Rs. RS.

Balance as per pass book as on 31-12-07 6,380

Add: 1. Cheques deposited, but not 2,356
credited
2. Amount debited by bank in error 100
3. Insurance premium paid by bank 86

Less: 1. Cheques issued but 1,200

not presented for payment
2. Interest credited in pass book 40
3. Dividends credited in pass 80
book only

CCP102.82 28
A bill Rs.600/- discounted, has been
dishonoured and debited in pass book
 A bill Rs.600/- discounted
 Trader debits cash book
 But dishonoured
 Banker debits pass book
 But no entry in cash book

CCP102.82 29
On comparison of balances
as on 31-12-07

 Pass book shows lower balance

 Cash book shows higher balance

CCP102.82 30
To reconcile the balances in
Bank Reconciliation Statement as
per pass book balance

 Add

CCP102.82 31
Bank Reconciliation Statement as on
31-12-2007
Particulars Amount Amount
Rs. Rs.
Balance as per pass book as on 31-12-07
Add: 1. Cheques deposited, but not credited 2,356 6,380
2. Amount debited by bank in error
3. Insurance premium paid by bank 100
4. Discounted bill dishonoured and 86
debited in pass book 600
3,142
9,522
Less: 1. Cheques issued but not 1200
presented for payment 40
2. Interest credited in pass book 80
3. Dividends credited in pass book only 1,320
Balance as per Cash Book as on 31-12-07 8,202
CCP102.82 32
Assignment
Prepare Bank Reconciliation Statement as on 31-12-07
 Balance as per cash book Rs.1,75,000/-
 Cheque issued for Rs.70,000/- on 28-12-07,
presented for payment on 02-01-08
 Cheque Rs.30,000 paid into bank on 24-12-07 for
collection dishonoured on 10-1-07
 The following transactions had not been recorded in
cash book
1. Interest on debentures Rs.3,200/-
2. Bank charges Rs.100/-
3. Insurance premium Rs.50/-
4. Interest on overdraft Rs.1,200/-
 (Balance as per Pass Book Rs.2,16,850)

CCP102.82 33
Summary

In this class, we discussed about

Preparation of Bank Reconciliation Statement

 the causes for disagreement of Cash Book
and Pass Book balances
 analyzing the causes
 comparing the entries
 adjusting the entries in Bank Reconciliation
Statement

CCP102.82 34
Quiz
1. While preparing B.R.S, favourable balance as per cash
book means
b) Debit balance
c) Credit balance
d) None of the above

CCP102.82 35