UNIT-III

BANK RECONCILIATION STATEMENT

Note:
Cash book Debit (+) Credit (-)
Pass book Credit (-) Debit (+)

1) From the following information, extract a bank reconciliation statement as on

31stDecember, 2008
1. The balance as per Cash book on 31-12.2008 Rs.12000/-
2. Cheque issued but not presented in the bank Rs.1600/-
3. Cheque paid into bank but not cleared before 31st Dec,08 Rs.2000/-
4. Interest on investment Rs.300/-
5. Bank Charges made by the bank Rs.30/-

Solution:
Bank Reconciliation Statement as on 31st December 2008
Particulars Amount in Rs. Debit Amount in Rs. Credit
(+) (-)
Balance as per Cash book 12000
Cheque issued but not presented in the bank 1600
st
Cheque paid into bank but not cleared before 31 2000
Dec,08
Interest on investment 300
Bank Charges made by the bank 30
TOTAL 13900 (2030)
Debit balance as per Pass Book 11870

2) Prepare a bank reconciliation statement from the following on 28th Feb, 2009. Cash book
showed a bank balance Rs.11000.

1. A cheque issued but not presented for payment Rs.900/-

2. A post-dated cheque if RS.1000 has be debited in the bank column of the cash book but it was not
possible to present.
3. Three cheque of Rs.1500 sent for collection but not cleared so far by the bank
4. A cheque for rs.500 deposited in the bank has been dishonored.
5. Trade subscription directly paid by the bank Rs.200
6. The bank debit for Rs.100 in respect of bank charges and credit Rs.200 for dividend collected by the
bank.
Solution:
Bank Reconciliation Statement as on 28th February 2009

Particulars Amount in Rs. Debit Amount in Rs. Credit

(+) (-)
Balance as per Cash book 11000
A cheque issued but not presented for payment 900
A post-dated cheque has be debited in the bank 1000
column of the cash book but it was not possible
 to present
Three cheque of Rs.1500 sent for collection but 4500
not cleared so far by the bank [1500*3]
A cheque deposited in the bank has been 500
dishonored.
Trade subscription directly paid by the bank 200
Bank charges 100
Dividend credited collected by bank 200
TOTAL 12100 (6300)
Debit balance as per Pass Book 5800

3) From the following particulars a Bank Reconciliation Statement for the year ending on
31st March 2011

(i) Bank balance as per Cash Book Rs 8,600

(ii) Cheques of Rs 4,000 issued but not presented for payment
(iii) Bank debited bank charges Rs 200
(iv) Cheque of Rs 2,800 deposited into the Bank but not Credited by Bank
(v)Bank paid Insurance Premium on our behalf directly Rs 2,500 not recorded in the Cash
Book.
(vi) Bank Credited interest on investment Rs 1,900 but not recorded in the Cash Book.
Solution:
Bank Reconciliation Statement as on 31st March 2011

Particulars Amount in Rs. Debit Amount in Rs. Credit

(+) (-)
Balance as per Cash book 8600
Cheque issued but not presented for payment 4000
Bank charges 200
Cheque deposited into the Bank but not Credited 2800
by Bank
Bank paid Insurance Premium on our behalf 2500
directly not recorded in the Cash Book
Bank Credited interest on investment but not 1900
recorded in the Cash Book
TOTAL 14500 (5500)
Debit balance as per Pass Book 9000

4) From the following particulars, you are required to find out the errors in cash book and bank
statement by using missing method and prepare Bank Reconciliation Statement as on 31-
12-2016, for Chandran.

(i) Bank balance overdraft as per cash book 80,000

(ii) Cheque recorded for collection but not sent to the bank - 10,000
(iii) Credit side of the cash book cast short - 1,000
(iv) Premium on proprietor’s Life Insurance Policy (LIP) paid on standing order-5,000
(v) Bank Charges recorded twice in the cash book -100
(vi) Customer’s cheque returned by the bank as dishonoured -4,000
(vii) Bill Receivable collected by the bank directly on the behalf of company-20,000
(viii) Cheque received entered twice in the cash book -6,000
(ix) Cheque issued but dishonoured on technical grounds -3,000
(x) A Cheque deposited into the bank of worth Rs. 45,000 but Rs. 8,000 cheque was not collected
by bank

Solution:
Bank Reconciliation Statement as on 31st December 2016

Particulars Amount in Rs. Debit Amount in Rs. Credit

(+) (-)
Overdraft balance as per Cash book 80000
Cheque recorded for collection but not sent to the 10000
bank
Credit side of the cash book cast short 1000
Premium on proprietor’s Life Insurance Policy 5000
(LIP) paid
Bank Charges recorded twice in the cash book 100
Customer’s cheque returned by the bank as 4000
dishonored
Bill Receivable collected by the bank directly on 20000
the behalf of company
Cheque received entered twice in the cash book 6000
Cheque issued but dishonoured on technical 3000
grounds
A Cheque deposited into the bank of worth 8000
Rs. 45,000 but Rs. 8,000 cheque was not
collected by bank
TOTAL 23100 (114000)
Debit balance as per Pass Book 90900

5) Prepare Bank Reconciliation Statement as on 31st January 2011 from the following details.

(i) Cash Book shows debit balance of Rs 5000 as on 31st January, 2011.
(ii)Out of cheques of Rs 8,000 issued, cheques of Rs 4,000 has not been presented for payment
till 31st January, 2011.
(iii) Bank commission Rs 75 debited in the Pass Book only.
(iv) Transferred Rs 2,000 from Fixed deposit account to Current account, but not recorded.
(v)A cheque of Rs 4,500 deposited into Bank but not cleared by Bank.
(vi) Divided collected by Bank, though recorded in the Pass Book, failed to be recorded in the
Cash Book Rs. 650.

Solution:
Bank Reconciliation Statement as on 31st January 2011

Particulars Amount in Rs. Debit Amount in Rs. Credit

(+) (-)
Balance as per Cash book 5000
Out of cheque of Rs. 8,000 issued, cheque of Rs. 4000
4,000 has not been presented for payment till 31st
 January, 2011.
Bank commission debited in the Pass Book only 75
Transferred Rs. 2,000 from Fixed deposit account 2000
to Current account, but not recorded.
Cheque deposited into Bank but not cleared by 4500
Bank.
Divided collected by Bank failed to be recorded 650
in the Cash Book
TOTAL 11650 (4575)
Debit balance as per Pass Book 7075

6) Pass Book showed the balance of Rs 3,500 as on 30th September 2011. On the same date Cash
Book showed the balance of Rs 3,170.

The following Points were noted.

(i) Bank collected Dividend on shares Rs 400, but not entered in the Cash
Book
ii) Cheques paid into Bank but not Credited by Bank Rs 570
iii) Discounted Bill dishonoured Rs. 750 debited by Bank, but no intimation was
received from the Bank
iv) Cheques of Rs 1,250 was issued on 29th September 2011 but not presented to
the Bank for payment till 30th sept. 2011
Prepare Bank Reconciliation Statement as on 30th September, 2011

Solution:
Bank Reconciliation Statement as on 30st September 2011

Particulars Amount in Rs. Debit Amount in Rs. Credit

(+) (-)
Balance as per Cash book 3170
Bank collected Dividend but not entered in the 400
Cash Book
Cheques paid into Bank but not Credited by Bank 570
Discounted Bill dishonoured debited by Bank, 750
but no intimation was received from the Bank
Cheques issued on 29th September 2011 but not 1250
presented to the Bank for payment till 30th sept.
2011
TOTAL 4820 (1320)
Debit balance as per Pass Book 7075

7) From the following particulars prepare a Bank Reconciliation Statement to find out the
causes of difference in two balances as on August 31st, 2016 for Four Star Ltd.

(i) Bank Overdraft as per Bank Statement -17,000

(ii) Cheque issued but not encased during the August -2,200
(iii) Dividends on shares collected by banker - 2,300
(iv) Interest charged by the bank recorded twice in the Cash Book -500
 (v) Cheque deposited as per Bank Statement not entered in Cash Book-3,400
(vi) Credit side of the Bank column in Cash Book cast short -1,000
(vii) Clubs dues paid by bank as per standing instruction not recorded in Cash Book … 1,200
(viii) Uncredited cheque due to outstation- 3,900

Solution:
Bank Reconciliation Statement as on 31st August 2016

Particulars Amount in Rs. Debit Amount in Rs. Credit

(+) (-)
Overdraft balance as per Bank book 17000
Cheque issued but not encased during the August 2200
Dividends on shares collected by banker 2300
Interest charged by the bank recorded twice in 500
the Cash Book
Cheque deposited as per Bank Statement not 3400
entered in Cash Book
Credit side of the Bank column in Cash Book 1000
cast short
Clubs dues paid by bank as per standing 1200
instruction not recorded in Cash Book
Uncredited cheque due to outstation 3900
TOTAL 25400 (6100)
Credit balance as per Cash Book 19300

8) From the following particulars, find out the errors in cash book and bank statement and
prepare Bank Reconciliation Statement as on 31-05-2016 for Sugar Mill Ltd

(i) Balance as per bank statement overdraft of Rs. 2,118.

(ii) The debit side of the cash book had been under cast by Rs. 300.
(iii) A Cheque for Rs. 182 drawn for the payment of telephone bill had been entered in the cash
book as Rs. 281 but was shown correctly in the bank statement.
(iv) A Cheque for Rs. 210 by the customer having been deposited into bank was dishonoured by
the bank cheque was credited twice in Cash Book for worth Rs. 3,000.
(v) A Dividend of worth Rs. 90 had been collected by the bank but not recorded in the cash book.

Solution:
Bank Reconciliation Statement as on 31st May 2016

Particulars Amount in Rs. Debit Amount in Rs. Credit

(+) (-)
Overdraft balance as per Bank book 2118
The debit side of the cash book had been under 300
cast
A Cheque for Rs. 182 drawn for the payment 99
of telephone bill had been entered in the cash
book as Rs. 281 but was shown correctly in
the bank statement. [281-182=99]
A Cheque for Rs. 210 by the customer having 210
been deposited into bank was dishonoured by the
bank
Cheque was credited twice in Cash Book 3000
Dividend had been collected by the bank but not 90
recorded in the cash book.
TOTAL 3489 (210)
Credit balance as per Cash Book 5397