Bank reconciliation statement

Several transactions may take place between the customer and with the customers’ bank during a
specific period. However all these transactions are not recorded in the banks pass book and
customers cash book instantaneously. As a result the pass book balance may differ from the
balance in the customer’s cash book.

Bank reconciliation statement (BRS) is a statement used to ascertain the reason for variation
between cash book and bank pass book. BRS is a statement prepared by the customer of a bank
account for showing the cause of disagreement between his cash book and the bank pass book on
a particular date.

It can be prepared

a) With cash book balance or

b) With pass book balance

Cause of difference in cash book and pass book

Reason for variation Impact in Impact To To correct

cash book in Pass correct pass book
Balance book cash
book
a. Cheque issued but not present for Add Deduct
payment amount amount

b. Cheque from customer sent for Deduct Add

collection but not collected amount amount
c. Direct payment by customer in to bank Add Deduct
amount amount

d. Interest on deposit allowed Add Deduct

amount amount

e. Interest/Dividend collected by the bank Add Deduct

amount amount

f. Bank charges deducted by the bank Deduct Add

amount amount
g. Bank made payment on behalf of Deduct Add
customer amount amount
h. Interest on Bank Overdraft Deduct Add
amount amount
i. Bill discounted dishonored Deduct Add
j. amount amount
Practical questions

On 31st March 2012 the cash book of Rohitkumar showed a total balance of Rs. 48000. However
his pass book accounts a credit balance of Rs. 45000. A detailed comparison of entries revealed
the following.

a. Customer cheques amounting to Rs. 9500 had not been collected and credited by the
bank.
b. Cheque amounting Rs. 6000 has not been presented for payment.
c. Bank charges Rs. 500 debited to pass book.
d. Interest on investment Rs. 3000 collected by the bank appears on pass book only.
e. A customer had paid a sum of Rs. 6000 directly into bank.
f. A cheque Rs. 8000 from customer deposited with the bank dishonored.

1) Prepare Bank Reconciliation Statement from Cash book balance

2) Prepare Bank Reconciliation Statement from Pass book balance

Bank Reconciliation Statement from Cash book balance

Particulars Rs.
Cash book balance 48000
Add:
a. Cheque was not presented for payment 6000
b. Interest on investment 3000
c. Customer paid directly into bank 6000

Total 15000
63000
Less:
a. Customer cheque not collected and credited by bank 9500
b. Cheque deposited into bank dishonored 8000
c. Bank Charges 500
Total 18000

Balance as per pass book 45000

st
Note: please refer to the table given in 1 page for identifying impact of transactions and allied
accounting treatment
Bank Reconciliation Statement from Pass book balance

Particulars Rs.
Pass Book Balance 45000
Add:
a. Customer cheque not collected and credited by bank 9500
b. Cheque deposited into bank dishonored 8000
c. Bank Charges 500

Total 18000
63000
Less:
a. Cheque was not presented for payment 6000
b. Interest on investment 3000
c. Customer paid directly into bank 6000
Total 15000

Balance as per Cash book 48000

st
Note: please refer to the table given in 1 page for identifying impact of transactions and allied
accounting treatment