From Cash Book to Pass Book

  • Bank reconciliation statement is prepared on a particular date to reconcile the bank balance as per the cash book with the balance as per the bank pass book.
  • Bank reconciliation statement brings out any error that may have been committed either in the Cash Book or in the Pass Book, highlights any undue delay in the clearance of cheques, discourages embezzlements, etc.
  • Differences due to timing include cheques issued but not presented for payment andcheques deposited into the bank but not yet cleared.Transactions recorded by the bank include direct payment made by the bank on behalf of the customer, direct collections on behalf of the customers and cheques deposited dishonoured.
  • Differences due to transactions recorded by bank include direct payment made by the bank on behalf of the customer, direct collections on behalf of the customer andcheque deposited dishonoured.
  • Differences due to errors include errors committed in the cash book and errors committed in the pass book. Errors in the cash book include cheques deposited or issued but not recorded or wrongly recorded. Errors in the pass book include cheques collected by the bank but not recorded, deposits recorded on withdrawal side and vice-a-versa etc.
  • A bank reconciliation statement is prepared starting with the cash book balance or pass book balance.
  • When starting balance as per cash book is taken transactions that increase pass book balance or decrease cash book balance are added and transactions that decrease pass book balance or increase cash book balance are deducted to reach balance as per pass book.
  • Debit balance as per cash book and credit balance as per pass book means favourable balance.
  • Credit balance as per cash book and debit balance as per pass book means unfavourable balance.
  • Favourablebalance as per cash book is written in the plus column, while unfavourable balance as per pass book is written in the minus column.

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