The document discusses bank reconciliation statements. It explains that a bank reconciliation statement analyzes the reasons for differences between the balance in a company's cash book and its bank statement on a given date. Common reasons for differences include checks that have been written but not cleared yet and deposits made that have not appeared in the bank statement yet. The document provides a detailed format for preparing a bank reconciliation statement, including items that should be added or subtracted to reconcile the two balances.

1. BANK RECONCILIATION STATEMENT
Triple Column Cash Book consist of Cash columnn, Bank column and Discount column.
In the Bank Column of Triple Column Cash Book , all Payments and all Receipts pertaining to Bank transactions will be recorded .
eg : Cheque Issued, Cheque deposited in the Bank, Bank Interest paid, Interest received in the Bank, Payments directly deposited by third Party
into our Bank a/c, Payments directly made on Customer behalf as per his standing instructions.
Pass Book or Bank Statement : In the Pass book or Bank Statement one will find the Bank accounts details as it will appear in the Books of the
Bank. Hence it is also known as replica of Bank Book.
Bank Reconciliation Statement : B.R.S is prepared and presented in the form of a Statement which analysis the reasons for the difference in the
balance as per Bank column of Cash Book and Balance as per PassBook/Bank Statement on a specified date .
Reasons why the Balance as per Cash Book Bank column and as per Pass Book does not tally are :
1 Cheque Issed but not presented for payment by the Payee.(Payee means Receiver of the amt. specified in the Cheque).
2 Cheque deposited but not Cleared (as there is a time lag between cheque deposited by us in the Bank an the Clearance of Cheque by
the Bank. Usually it takes three working days for clearing a cheque after it is deposited in the Bank.
3 Direct deposit by third party in our Bank a/c. without our knowledge .
4 Certain Payments made by Bank on behalf of the Customers as per his standing instructions like Insurane premium , Electricity Bills etc.
5 Wrong entries or errors commited by accountant of the business or by Bank's clerk.
6 Interest charged by Bank or interest credited by the Bank not recorded in the Bank column of Cash Book due to lack of information.
7 Certain direct income like Dividends on Shares directly credited by Bank not recorded in the Bank column of Cash Book due to lack of information.
8 Dishonour of Bill discounted with the Bank on the due-date by the drawee .
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2. BANK RECONCILIATION STATEMENT
Format of B.R.S taking Debit/ Favourable balance as per Bank column of Cash Book as starting point
B.R.S as on (particular date ) (for eg: B.R.S as on 30th November,2010.)
Particulars Details Amount
Closing Debit Balance as per Bank column of Cash Book xxxx
Add a Cheques issued but not presented for payment xxx
b Cheques deposited into Bank but not recorded in Cash Book xxx
c Interest directly credited by Bank xxx
d Bills Receivable directly collected by the Bank xxx
e Direct payment by a Customer into the Bank but not recorded in the Cash Book xxx
f Cheque issued returned on techinical grounds xxx
g A Wrong credit given by the Bank in the Pass Book xxx xxx
xxxx
Less a Cheques deposited but not yet collected by the Bank xxx
b Cheques received & recorded in the Bank column of Cash Book but not yet sent
to Bank for Collection xxx
c Bank Charges, Interest on Overdraft debited in Pass Book only xxx
d Payments(eg :Insurance Premium) directly made by Bank under standing instruction xxx
e A Wrong debit given by the Bank in the Pass Book xxx
f Discounted Bills dishonoured but not recorded in the Cash Book xxx
g Chequesdeposited for Collection, returned dishonoured and recorded in Pass Book only xxx xxx
Closing Balance as per Bank Statement/Pass Book xxx
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3. BANK RECONCILIATION STATEMENT
Note : 1) For preparing B.R.S Starting with Overdraft balance as per Pass Book / Bank Statement follow the same steps as given above for preparing
B.R.S taking Debit/ Favourable balance as per Bank column of Cash Book as starting point .
Note : 2) For preparing B.R.S Starting with Overdraft balance as per Bank column of Cash Book follow the Opposite steps as given above for preparing
B.R.S taking Debit/ Favourable balance as per Bank column of Cash Book as starting point.(i.e items which are to be added should be deducted
and items which are to be deducted should be added ).
Note : 3) For preparing B.R.S Starting with Favourable balance as per Bank Pass Book / Bank Statement follow the Opposite steps as given above for
preparing B.R.S taking Debit/ Favourable balance as per Bank column of Cash Book as starting point.(i.e items which are to be added should
be deducted and items which are to be deducted should be added ).
Practise few Illustrations given in the ICAI Book
Adjusted Cash-Book : means rectifying certain errors in Cash Book(Bank Column) before preparing B.R.S
Errors that can be rectified in the Cash Book (Bank Column )are as under :
1 Wrong amount recorded in the Cash Book.
2 Entry posted twice in the Cash Book.
3 Over/Under casting of balance etc. in the Cash Book .
4 Omissions(entries not previously recorded in the Cash Book ) like bank charges, interest debited by Bank , dishonour of Cheques/Biils ,
Direct Receipt or payments by Bank .
Note : Errors occurred in the Pass -Book are not adjusted in the Adjusted Cash Book.
Delay in recording in the Pass Book due to difference in timing (like Cheque issued but not presented for Payment, Cheque deposited
but not collected ) are not to be adjusted in the Adjusted Cash Book but should appear in B.R.S
Adjusted Cash Book can be prepared at the Year end i.e on 31st March of every Year and that B.R.S can be prepared after taking into
account errors rectified in the Adjusted Cash Book .
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4. BANK RECONCILIATION STATEMENT
Solve all the Self Examination Questions.
Few MCQ's are given in the MCQ's sheet you can also solve the same.
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