DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH

Name of the Participant : M. Ramakrishna

Designation : Head of Section
Branch : Commercial & Computer Practice
Institute : Govt. Polytechnic for women,
Bheemunipatnam
Year/Semester : I Year
Subject : Accountancy-I
Sub-code : CCP-102
Topic : Bank Reconciliation Statement
Sub Topic : Purpose & meaning of
Bank Reconciliation Statement
Duration : 50 Minutes
Teaching aids : Power Point Presentation

CCP102.80 1
Objectives:

On completion of this period, you would be able to:

 Prepare Bank Reconciliation Statement

 know causes for disagreement between
 cash book and pass book balances
 understand comparison of balances
 prepare reconciliation of balances

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Recap

In the last class, we discussed about

Preparation of Bank Reconciliation Statement

 The causes for disagreement between

Cash Book Balance and Pass Book Balance
 Analysing the causes
 Comparison of balances
 Adjusting the entries in Bank Reconciliation
Statement

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What is Bank Reconciliation Statement?
 Statement prepared on a particular date
 Taking cash book or pass book balance
as starting point
 Comparing the entries in the pass book and
cash book
 Adjusting the entries by add or less to the
given book balance
 To find out the balance of the opposite book

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Proforma of Bank Reconciliation Statement

Particulars Amount Amount

Rs. Rs.
Balance as per Pass Book ---
Add: 1 --------- ---
2 --------- --- ---

---
Less: 1 ---------- ---
2 --------- --- ---

Balance as per Cash Book ---

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Prepare Bank Reconciliation Statement
and show the balance as per pass book

 Cash book balance Rs.10,000/- as on 31-01-08

 Cheques Rs.2,000/- deposited, but Rs.800/-
not collected before 31-01-08
 Cheques issued, but not presented Rs.1,400/-
 Interest on investments credited in pass book only
 Bank charges Rs.20/- debited in the pass book only

CCP102.80 6
Cheques Rs.2000/- deposited, but
Rs.800/- not collected

 Cheques deposited Rs.2000/-

 Trader debits cash book with 2000/-
 But Rs.800/-not collected

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On comparison of balances
as on 31-01-08

 Cash book shows higher balance

 Pass book shows lower balance

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To reconcile the balances in
Bank Reconciliation Statement as per
cash book balance

 Less

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Bank Reconciliation Statement as on
31-01-2008

Particulars Amount Amount

Rs. Rs.
Balance as per cash book as on 31-01-08 10,000
Add:

Less: 1.cheques deposited but not collected 800

CCP102.80 10
Cheques issued but not presented before
31-01-08 were Rs.1,400/-

 Cheques issued
 trader credits cash book
 but not presented for payment

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On comparison of balances
as on 31-01-08

 Cash book shows lower balance

 Pass book shows higher balance

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To reconcile the balances in
Bank Reconciliation Statement as per
cash book

 Add

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Bank Reconciliation Statement as on 31-
01-2008

Particulars Amount Amount

Rs. Rs.
Balance as per cash book as on 31-01-08 10,000
Add: 1.Cheques issued , but not presented 1,400

Less: 1.cheques deposited but not collected 800

CCP102.80 14
Interest on investments, credited in
pass book only Rs.50/-

 Interest on Investments Rs.50

 Credited in pass book
 No entry in cash book as on 31-01-08

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On comparison of balances
as on 31-01-08

 Pass book shows higher balance

 Cash book shows lower balance

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To reconcile the balances in
Bank Reconciliation Statement as per
cash book balance

 Add

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Bank Reconciliation Statement as on 31-
01-2008

Particulars Amount Amount

Rs. Rs.
Balance as per cash book as on 31-01-08 10,000
Add: 1.Cheques issued , but not 1,400 1,450
presented
2. Interest on Investments 50

Less: 1.cheques deposited but not

collected 800

CCP102.80 18
Bank charges debited in pass book Rs.20

 Bank charges
 Debited in pass book
 No entry in cash book

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On comparison of balances
as on 31-01-08

 Pass book shows lower balance

 Cash book shows higher balance

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To reconcile the balances in Bank
Reconciliation Statement as per
cash book

 Less

CCP102.80 21
Bank Reconciliation Statement as on 31-
01-2008

Particulars Amount Amount

Rs. Rs.
Balance as per cash book as on 31-01-08 10,000
Add: 1.Cheques issued , but not 1,400 1,450
presented
2. Interest on Investments 50

Less: 1.cheques deposited but not

collected 800
2 Bank charges debited in Pass Book
20

CCP102.80 22
Solution:
Bank Reconciliation Statement as on 31-
01-2008

Particulars Amount Amount

Rs. Rs.
Balance as per cash book as on 31-01-08 10,000
Add: 1.Cheques issued , but not presented 1,400
2. Interest on Investments credited in 50 1,450
pass book only
11,450

Less: 1.cheques deposited but not

collected 800 820
2. Bank charges debited in pass book 20
Balance as per Pass Book as on 31-01-08 10,630
CCP102.80 23
Summary

We have discussed about

 Preparation of Bank Reconciliation

Statement
 Causes of disagreement between balances
of
 Cash book and pass book
 Comparison of balances
 Reconciliation of balances

CCP102.80 24
Quiz

CCP102.80 25
1.For given pass book balance, interest
on deposit, not entered in the cash
book, should be Add to pass book

 True
 False

CCP102.80 26
2. For given cash book balance, direct payment by the
customer entered only in the pass book, should be

 Add
 Less

CCP102.80 27
Assignment

1. Pass book credit balance Rs.1,500 as on 31-12-07

a) Cheques deposited Rs.5,000/- but Rs.3,000/- only

has been realised
b) Cheques issued Rs.6,000/-, but Rs. 3,500/-
were not presented
c) Interest on Investments Rs.200/- not entered
in
cash book
d) Bank charges debited in pass book only
Rs.30/-
(Balance as per Cash book Rs. Rs.830)
CCP102.80 28