This document defines various banking terminology like reconcile, standing order, credit transfer, bank charges, dishonored cheque, unpresented cheques, bank statement, and uncredited deposits. It also explains some common causes for differences between a cash book balance and bank statement balance such as cheques deposited but not yet cleared, cheques issued but not presented, errors and omissions, bank charges, interest, and direct payments into the bank. Additionally, it outlines the nature of cash books and pass books, how debits and credits affect each, and the main points in preparing a bank reconciliation statement.

4. TERMINOLOGY
• Reconcile – to make things agree
• Standing order – an instruction to the
banker to pay a specific party a specified
sum for a specified period on a regular
basis
• Credit transfer- a deposit made to one’s
account directly through the bank system
• Bank charges- fee for penalties incurred
upon using the banking facilities(ctd.)

5. • Dishonored cheque- a cheque which the bank
could not cash(honour) because of a transcription
error or insufficient funds
• Un presented cheques - cheques which creditors
have not presented for payment
• Bank statement – a report from the bank showing
the dated transaction and activities that occurred
to your account over the period
• Un credited deposits- deposits which have not
been lodged/recorded on the bank statement
TERMINOLOGYTERMINOLOGY

7. CAUSES OF
DIFFERENCE CHEQUES
DEPOSITED INTO
BANK,BUT NOT
YET COLLECTED
CHEQUE ISSUED
BUT NOT
PRESENTED FOR
PAYMENT
ERRORS AND
OMISSIONS
BANK CHARGES
DEBITED BY THE
BANK
INTEREST
ALLOWED BY BANK
INTEREST ON
OVERDRAFT
CHARGED BY BANK
AMOUNT
COLLECTED BY
BANK ON BEHALF
OF CUSTOMER
PAYMENT MADE
BY BANK ON
BEHALF OF
CUSTOMER
DIRECT PAYMENT
INTO BANK BY
DEBTORS

8. NATURE OF CASH BOOK AND BANK
PASS BOOK
TYPE OF BOOK DEPOSIT OVERDRAFT
CASH BOOK DEBIT BALANCE CREDIT BALANCE
PASS BOOK CREDIT BALANCE DEBIT BALANCE

9. EFFECT OF DEBIT AND CREDIT IN
CASH BOOK AND BANK PASS BOOK
TYPE OF BOOK BALANCE DEBIT CREDIT
CASH BOOK
DEPOSIT
(DEBIT)
INCREASE DECREASE
OVERDRAFT
(CREDIT)
DECREASE INCREASE
PASS BOOK
DEPOSIT
(CREDIT)
DECREASE INCREASE
OVERDRAFT
(DEBIT)
INCREASE DECREASE

10. MAIN POINTS IN THE PREPARATION OF BANK
RECONCILIATION STATEMENT
BANK
RECONCILIATION
STATEMENT IS
PREPARED BY THE
CUSTOMER
IT CAN BE PREPARED AT
ANY TIME
IT IS PREPARED BY
TAKING THE CLOSING
CASHBOOK OR PASS
BOOK BALANCE
ADJUST THE EFFECT OF
EACH ITEM CAUSING THE
DIFFERENCE BY ADDING
OR DEDUCTING WITH THE
OPENING BALANCE