Unit: IV

Bank Reconciliation Statement

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 Unit: IV
Bank Reconciliation Statement
Introduction
You operate a bank account in which you deposit money and withdraw money from time to time. You
maintain a record with yourself of these deposits and withdrawals. One day when you got your pass-book
(statement issued by the bank) updated you were surprised to find that the balance shown by the pass book
was different from what it should have been as per your records. What will you do in this case? It is obvious
that you will compare the two sets of records and find out items which are recorded in one but not in the
other. Similar situation may arise in case of a business concern which operates a bank account. These
business concerns maintain record of all of their banking transactions in their bank column of the cash book.
On any particular date the bank balance shown by the bank column of cash book and that shown by the pass
book should be the same. But if there is difference between the two, the business concern will find out the
reasons to reconcile the balance. In this unit you will learn about reasons for difference and prepare the
reconciliation statement called Bank Reconciliation Statement.
Meaning of Bank Reconciliation Statement
A bank reconciliation statement is a document that compares the cash balance on a company’s balance sheet
to the corresponding amount on its bank statement. Reconciling the two accounts helps identify whether
accounting changes are needed. Bank reconciliations are completed at regular intervals to ensure that the
company’s cash records are correct. They also help detect fraud and any cash manipulations.

Reasons For Difference

When a businessman compares the Bank balance of its cash book with the balance shown by the bank pass
book, there is often a difference. As the time period of posting the transactions in the bank column of cash
book does not correspond with the time period of posting in the bank pass book of the firm, the difference
arises. The reasons for difference in balance of the cash book and pass book are as under:
i) Cheques issued by the Trader but not yet presented for payment: When cheques are issued by Trader
in favour of his creditors, these are shown on the payment side of the bank column of the cash book. It
reduces the bank balance as per cash book. The bank will debit the firm’s account when these cheques are
presented for payment. There is a time period between the issue of cheque and its being presented in the
bank for payment. This may cause difference to the balance of cash book and pass book.
ii) Cheques deposited into bank but not yet collected or credited by the Bank: When cheques are
deposited into bank, the firm immediately enters it on the debit side of the bank column of cash book. It
increases the bank balance as per the cash book. However, it takes time in, collecting the amount of
cheques, so Bank Balance does not increase on the same date on which cheque has been deposited in the
bank. This may cause the difference between cash book and pass book balance.
iii) Amount directly deposited by customers/debtors in the bank account: When the debtors of the
businessman have been given the authority to deposit the amount due from them in the firm’s account with

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the bank, the bank credits the firm’s account with the amount deposited but the same amount is not recorded
in the cash book on the day it is deposited. As a result the balance in the cash book will be less than the
balance shown in the Pass book.
iv) Bank charges charged by the Bank: The bank charges, fees or commission from time to time for
various services provided to the customer and debits the customers’ account without intimation to the
firm/customer. As a result, the balance of the cash book will be more than the balance of the pass book.
v) Interest and dividend received by the bank on behalf of the customer: The interest on debentures or
dividend on shares held by the account holder is directly deposited by the company in the bank account of
customer through Electronic Clearing System (ECS). But there may not be any entry in the cash book for
such items because the firm does not get the information till it receives the bank statement. As a
consequence, the firm enters it in its cash book on a date later than the date on which it is recorded by the
bank. As a result, the balance as per cash book and pass book will differ.
vi) Direct payments made by the bank on behalf of the customer: The firm may give standing
instructions to its banker to make payment of telephone bills, rent, insurance premium, taxes, etc. On
making such payments, the bank will debit the firm’s account immediately, but the firm will record the
same on receiving information from the bank in the form of Pass Book or bank statement. As a result, the
balance of the pass book is less than that of the balance shown in the bank column of the cash book.
vii) Dishonour of cheques deposited with bank: A firm may receive a number of cheques from its
customers. Some of the cheques deposited by the firm with the bank may be dishonoured. In this case, the
Bank debits firm’s account. But the firm records the same when it receives the information from the bank.
As a result, the balance as per cash book and that of pass book will differ.
viii) Errors committed in recording transactions by the firm: The firm may commit certain errors e.g.,
omission or wrong recording of transactions relating to cheques deposited, cheques issued and wrong
balancing etc. In this case, there would be a difference between the balances as per Cash Book and as per
Pass Book.
ix) Errors committed in recording transactions by the Bank: The bank may also commit errors while
recording transactions in the customer’s account, e.g., omission or wrong recording of transactions relating
to cheques deposited etc. As a result, the balance of the bank pass book and cash book will not agree.

Need of Bank Reconciliation Statement

Business concern maintains the cash book for recording cash and bank transactions. The Cash book serves
the purpose of both the cash account and the bank account. It shows the balance of both at the end of a
period. Bank also maintains an account for each customer in its book. All deposits by the customer are
recorded on the credit side of his/her account and all withdrawals are recorded on the debit side of his/her
account. A copy of this account is regularly sent to the customer by the bank. This is called ‘Pass Book’ or
Bank statement. It is usual to tally the firm’s bank transactions as recorded by the bank with the cash book.
But sometimes the bank balances as shown by the cash book and that shown by the pass book/bank
statement do not match. If the balance shown by the pass book is different from the balance shown by bank

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column of cash book, the business firm will identify the causes for such difference. It becomes necessary to
reconcile them. To reconcile the balances of Cash Book and Pass Book a statement is prepared. This
statement is called the ‘Bank Reconciliation Statement. It can be said that Bank Reconciliation Statement is
a statement prepared to reconcile the difference between the balances as per the bank column of the cash
book and pass book on any given date.

Format of Bank Reconciliation Statement

Bank reconciliation statement is a statement, not an account. It can be prepared by using various methods.
A simple format of Bank Reconciliation Statement is given as follows:

Particulars Amount Amount

Balance as per Cash Book (Dr.) -
Add.: 1. Cheques issued but not yet presented for payment -
2. Interest allowed/credited by bank -
3. Direct deposit of cheque/cash by a customer into bank -
4. Interest on investment collected by the bank
5. Dividend on shares collected by the bank -
6. Rebate on bills retired under rebate through the bank but -
full amount entered in the cash book
7. Any wrong entry on Cr. side of the pass book/ wrong -
credit given by bank
8. Undercasting error in the receipt side and overcasting
error in the payment side of cash book
Less: 1. Cheques deposited into bank but not yet collected or -
credited by bank
2. Cheque issued but not recorded in cash book
3. Bank charges -
4. Insurance premium/ rent/ taxes paid by bank -
5. Interest on overdraft charged by the bank -
6. Dishonored bills or cheques -
7. Discounted cheque or Bill dishonoured
8. Drawings made by partner not entered in cash book -
9. Any wrong entry on Dr. side of the pass book/ wrong -
debit given by bank
10. Overcasting error in the receipt side and undercasting

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 error in the payment side of cash book
Balance as per Pass Book(Cr.) -

Illustration 1 (Balance as per Cash Book):

From the following particulars of M/s ABC Limited prepare bank reconciliation statement as on
31.7.2023
i. Bank balance as per cash book Rs. 62,500
ii. Cheques deposited into bank but not credited up to 31.7.2023 Rs. 8,900
iii. Cheques issued but not presented for payment till 31.7.2023 Rs. 12,500
iv. Bank credited Rs. 5,000 for receiving dividend.
v. Bank charges debited by Bank Rs. 400

Bank Reconciliation Statement of M/s ABC Limited. As on July 31, 2023

Particulars Rs. Rs.

Balance as per cash book 62,500
Add: 1. Cheques issued but not presented for payment 12,500
2. Dividend received 5,000 17,500
Less: 1. Cheques deposited but not credited by the Bank 8900
2. Bank charges debited by bank 400 9300
Balance as per pass book 70,700

Illustration 2 (Balance as per Cash Book)

From the following particulars of DEF Traders, prepare a bank reconciliation statement on 30/6/23.
i. Balance as per the cash book Rs.1,00,000
ii Cheques for Rs.17,550 are deposited in the bank but not yet collected by the Bank.
iii.Rs.5250 charges for Credit Card fee is debited by bank, which is not recorded in cash book.
iv. There was also a debit in the pass book of Rs.40,000 in respect of a discounted bill dishonoured.

Bank Reconciliation Statement of M/s DEF Traders as on June 30, 2023.

Particulars (Rs.) (Rs.)

Balance as per cash book 1,00,000
Less: 1. Cheques deposited but not credited by the Bank 17,550
2. Credit card fee charges debited by the Bank 5,250
3. Discounted bill dishonoured recorded only in Pass book 40,000
Balance as per Pass Book 37,200

Illustration 3 (Balance as per Pass Book)

From the following particulars of M/s XYZ Limited. prepare bank reconciliation statement as on 31.7.2023.

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 i. Balance as per pass book i.e. Rs.70,700 as the starting point.
ii. Cheques deposited into bank but not credited up to 31.7.2023 Rs.8,900
iii. Cheques issued but not presented for payment till 31.7.2023 Rs.12,500.
iv. Bank credited Rs.5,000 for receiving dividend.
v. Bank charges debited by Bank Rs.400

Bank Reconciliation Statement of M/s XYZ Limited Traders as on 31/7/ 2023.

Particulars Rs. Rs.

Balance as per pass book 70,700
Add: 1. Cheques deposited but not credited by the Bank 8,900
2. Bank charges debited by bank 400 9300
Less:1. Cheque issued but not presented for payment 12,500
2. Dividend received 5000 17,500
Balance as per cash book 62,500

Illustration 4 (Balance as per Pass Book)

Bank Pass book of M/s MNO Industries showed a credit balance of Rs.1,27,350 on July 31,2023.
The following differences were found on that date between the cash book & the passbook
balances:
i. Cheques issued before July 31, 2023, amounting to Rs.79,000 had not been presented for payment.
ii. Two cheques of Rs.5,000 and Rs.3,500 were deposited into bank on July 31, but the bank
credited for the same in August.
iii. Insurance premium directly paid by bank Rs.5,000
iv.Rs.2,000 wrongly debited to the firm account by the bank.
Prepare Bank Reconciliation Statement as on July 31, 2023.

Bank Reconciliation Statement of M/s MNO Industries As on 31/7/23

Particulars Rs. Rs.
Balance as per pass book 1,27,350
Add: 1. Cheques deposited but credited by the Bank in Aug. 8,500
2. Insurance Premium Directly paid by Bank 5,000
3.Wrongly debited by the bank 2000 15,500
Less: Cheques issued but not presented for payment 79,000
Balance as per cash book 63,850

Sum 5: From the following information, prepare BRS as on 31st March, 2023
i. Cheques from Raman Rs. 2500, Vivek Rs. 3000 and Mohan Rs. 2400 were deposited into
account on 29th March, 2023 but were credited by the bank on 3rd April, 2023.
ii. Cheques issued to Kabir Rs. 5000 and Sameer Rs. 6000 on 27 th March, 2023 were presented for

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 payment on 7th April, 2023.
iii. A cheque for Rs. 1000 which was received from a customer was recorded in the Cash Book on
29th March, 2023 but was deposited in bank on 5th April, 2023.
iv. Bank statement shows a credit of Rs. 2500 for interest and a debit of Rs. 500 for bank charges.
v. Balance as per cash book was Rs. 1,80,000(Dr.) whereas the bank statement showed a credit
balance of Rs. 1,84,100
Sum 6: On 31st March, 2023, the Cash Book of Mahesh showed a debit balance of Rs. 49,000. Bank
statement
or bank pass book showed credit balance of Rs. 37,400. Entries I the cash book and bank pass book
were compared and the following differences were identified.
i. Cheques of Shyam Rs. 9000 and of Mohan Rs. 15,000 were deposited but were not collected up
to 31st March, 2023.
ii. Ramesh, a debtor, deposited a cheque of Rs. 8000 directly into the bank.
iii. Bank allowed an interest of Rs. 500.
iv. Cheque for Rs. 10,000 issued to Ramesh was not presented for payment.
v. Bank debited Rs. 6000, being insurance premium paid as per standing instructions.
vi. Bank debited Rs. 100 being bank charges
Prepare BRS as on 31st March, 2023.

Sum. 7: From the following information, prepare BRS as on 31st March 2023.
i. Debit balance of bank column as per cash book as on 31st March, 2023 Rs. 12,000
ii. Balance (credit) as per bank statement as on that date Rs. 16,500
iii. Out of the total cheques issued of Rs. 7000, cheques of Rs. 4000 were debited on 5 th April, 2023
and the remaining have not been presented yet.
iv. Cheques deposited of Rs. 3500 were credited on 4th April, 2023
v. Bank had debited Rs. 100 as bank charges and had collected Rs. 200 as interest on investments
vi. A cheque issued to S Ltd. for Rs. 3400 was recorded in the cash book as Rs. 4300

When there is a Situation of Bank Overdraft

When there is overdraft/ unfavorable balance as per Cash Book or Pass Book:
A simple format of Bank Reconciliation Statement is given as follows:

Particulars Amount Amount

Overdraft as per Cash Book (Cr.) -
Less.: 1. Cheques issued but not yet presented for payment -
2. Interest allowed/credited by bank -
3. Direct deposit of cheque/cash by a customer into bank -
4. Interest on investment collected by the bank

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 5. Dividend on shares collected by the bank -
6. Cheques issued returned unpaid(dishonored) -
7. Any wrong entry on Cr. side of the pass book/ wrong -
credit given by bank
8. Undercasting error in the receipt side and overcasting
error in the payment side of cash book
9. Cheques deposited in bank but not recorded in cash
book
Add: 1. Cheques deposited into bank but not yet collected or -
credited by bank
2. Cheques recorded but not yet deposited
3. Cheques issued but not recorded in cash book
4. Bank charges -
5. Insurance premium/ rent/ taxes paid by bank -
6. Interest on overdraft charged by the bank -
7. Dishonored bills or cheques -
8. Discounted cheque or Bill dishonoured
9. Drawings made by partner not entered in cash book -
10. Any wrong entry on Dr. side of the pass book/ wrong -
debit given by bank
11. Overcasting error in the receipt side and undercasting
error in the payment side of cash book
Balance as per Pass Book (Dr.) -

Illustration 8 (Overdraft as per Cash Book)

From the following particulars, ascertain the balance as would appear in the Pass Book of PQR
Industrial Works on 31st July, 2023.
i. Credit Balance as per Cash Book on 31st July,2023 was Rs.4,299
ii. Cheques issued but not cashed prior to 31st July, 2023 amounted to Rs.1,151
iii. Cheques paid into Bank but not collected before 31st July amounted to Rs.858
iv. There was a debit of Rs.40 for Bank charges in the Pass Book.

Bank Reconciliation Statement of PQR Industrial Works As on 31 July 2023

Particulars Rs. Rs.

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 Overdraft as per Cash Book (Cr.) 4,299
Less: Cheques issued but not yet presented for payment 1151
Add: 1. cheques paid into Bank but not collected 858
2. Bank Charges recorded in Pass Book 40 898
Overdraft as per Pass-Book (Dr.) 4046

Illustration 9: (Unfavourable balance as per Cash Book)

Prepare a Bank Reconciliation Statement from the following particulars:
i. On 31st March, 2021, the Cash Book showed a credit bank balance (i.e., bank overdraft) of Rs.2,000
ii. Out of the total cheques amounting to Rs. 20,000 drawn, cheques aggregating Rs.13,000 were encashed
in March, cheques aggregating Rs. 4,000 were encashed in April and the rest have not been presented
at all.
iii. Out of the total cheques amounting to Rs.15,000 deposited, cheques aggregating Rs.11,500 were
credited in March, cheques aggregating Rs. 2,000 were credited in April and the rest have not been
collected at all.
iv. The bank has debited Rs.1,500 on account of interest on overdraft and Rs. 100 as bank charges.
v. The bank has credited Rs.1,700 on account of interest collected on securities.
vi. A Bill Receivable of Rs.1,000 (discounted with the bank in January) dishonoured on 31st March (but not
yet recorded in the Cash Book).

Bank Reconciliation Statement As at 31st March, 2023

Particulars Rs. Rs.

Overdraft as per Cash Book (Cr.) 2,000

Less: 1. Cheques drawn but not presented for payment till 31st 7000
Marc 1700
2. Interest on securities collected by the Bank 3500
Add: 1. Cheques deposited but not collected till 31st March 1600
2. Interest on overdraft and bank charges 1000
600
3. Discounted bill receivable dishonoured
Overdraft as per Pass Book (Cr.)

Illustration 10: (Unfavourable balance as per Cash Book)

Comparing VWX Corporation’s Cash Book with the Bank Statement of his account for the month of November,
2023 the followings were noticed:
i. Cash Book showed an overdraft of Rs.45,000.
ii. A cheque for Rs.17,500 drawn on his saving account shown as drawn on his Current Account.
iii. Cheques amounting to Rs.70,000 drawn and entered in the Cash Book have not been presented.

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 iv. Cheques amounting to Rs...60,000 sent to the bank for collection, which though entered in the Cash
Book have not been credited by the bank.
v. Bank charges of Rs.1,750 as per Bank Statement have not been recorded in the Cash Book.
vi. Payment side of the Cash Book was by under cash Rs.1,500.
vii. Rs.35,000 dividend was collected by the bank on behalf of the customer.

Bank Reconciliation Statement of VWX Corporation’s As at 30th November, 2023

Particulars Rs. Rs.
Overdraft as per Cash Book (Cr.) 45,000
Add: Payment side of the Cash Book is undercast 1500
Cheques paid into the bank but not yet credited 60,000
Bank charges 1750
63,250

Less: 17,500
i. Cheques drawn on saving account but wrongly shown as
drawn on Current Account 70,000
ii. Cheques issued but not yet presented for payment 35,000 1,22,500
iii. Direct payment of dividend into the bank
Overdraft as per Pass Book (Cr.) 14,250

Illustration 11: (Overdraft as per Cash Book)

On September 30, 2023 there was an Overdraft at Rs.7,700 as per the Cash book of a businessman. When it
was compared with Pass Book it was discovered that:
i. Cheques amounting to Rs.3,500 were paid into Bank but those for only Rs.1,000 were credited in
Pass Book so far.
ii. Cheques amounting to 6,500 were issued in September but only cheques of Rs.2,650 were presented
for payment.
iii. A cheque received for Rs.2,000 was entered in the Cash Book but was not sent to the bank at all.
iv. There is a debit in the Pass Book for Rs.65 for bank charges and Rs.35 for interest.
v. Rs.2,400 have been directly deposited into bank by somebody. It does not appear in the Cash Book.
vi. Insurance premium has been paid by the bank Rs.1,500 under his standing instructions.
Prepare Bank Reconciliation Statement as on September 30, 2023.

Bank Reconciliation Statement as on September 30, 2023

Particulars Rs. Rs.
Overdraft as per Cash Book 7,700
Add: Cheques deposited but not cleared (Rs.3,500 – Rs.1,000) 2500
Cheque entered in Cash Book but not sent to bank. 2000

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 Bank charges 65
Interest charged by bank 35
Insurance premium paid by bank 1500 6100
Less: Cheques issued but not enchased till date (Rs.6,500 – Rs.2,650) 3,850
Amount directly deposited by some customer 2400 6250

Overdraft as per Pass Book 7550

Sum 12: Following information is of Roshan who requires you to reconcile his cash book with the pass
book balance
Balance as per Cash Book (Cr.) Rs. 2800
Cheques issued but not presented for payment Rs. 3440
Cheques deposited but not credited Rs. 2260
Additional information:
a. Debit side of the cash book (bank column) is undercasted by Rs. 500
b. A cheque of Rs. 200 paid to a creditor has been entered by mistake in the cash column
c. Bank charges Rs. 80 have not been entered in the cash book

Sum 13: From the following information, determine the balance of the Bank Pass book of Amrit as on 31 st
March, 2023:

i. Bank overdraft of Rs. 63,400 as per cash book on 31st March, 2023
ii. Interest on overdraft for 6 months ended 31 st March, 2023 Rs. 1600 entered in the bank pass
book was not recorded in the cash book
iii. Bank charges of Rs. 300 are debited in the pass book but are not recorded in cash book.
iv. Cheques issued but not presented for payment prior to 31st March, 2023 were Rs. 11,680
v. Cheques deposited in the bank but not collected before 31st March, 2023 were Rs. 21,700
vi. Interest on investments collected by the bank and credited in the bank passbook Rs. 12,000
vii. Credit side of the bank column of the cash book was undercast by Rs. 1000

Sum 14: Prepare BRS as on 30th April, 2023 for Jyoti Sales Private Ltd. from the information
Given below:

i. Bank overdraft as per cash book on 30th April, 2023 Rs. 1,10,450
ii. Cheques issued on 20th April, 2023 but noy yet presented Rs. 15,000
iii. Cheques deposited but not yet credited by the bank Rs. 22,750
iv. Cheque deposited by a customer credited in account was not advised by the bank Rs. 47,200
v. Interest debited by the bank on 27th April, 2023 but no advice received. Rs. 12,115

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 vi. Subsidy received from the authorities by the bank on our behalf, credited to the account Rs.
22,000
vii. Amount wrongly debited by the bank Rs. 2400
viii. Amount wrongly credited by the bank Rs. 5000
When starting point is Balance as per bank statement/passbook (Favourable/Credit)
Sum 15: On 31st march, 2023, bank statement of Rajeev showed a credit balance of Rs. 15,650 whereas the
cash book showed a debit balance of Rs. 15,200. The reasons for the differences were;
i. Cheques issued to Roshan for Rs. 6000 and to Daniel for Rs. 3840 were not presented for
payment.
ii. Bank charged Rs. 350 for bank charges, which was not recorded in the cash book.
iii. Nitesh directly deposited Rs. 8160 into the bank account of the trader which was not entered in
the cash book
iv. Two cheques one from shyam for Rs. 5150 and another from Kailash Rs. 12,500 were collected
by bank on 2nd April, 2023 although they were deposited on 29th march, 2023
v. Interest credited by bank was Rs. 450, which was not recorded in the cash book.
Prepare BRS as on 31st March, 2023

Sum 16: Prepare BRS as on 31st March, 2023 from the following information
Bank statement showed a credit i.e. favourable balance of Rs. 9214
i. On 29th March, 2023 bank credited a sum of Rs. 1650 in error
ii. Cheques totalling Rs. 4500 issued on 29th March, 2023 were not cleared
iii. Life insurance premium Rs. 950 paid by a standing order was not recorded in the cash book
iv. A cheque of Rs. 600 received, deposited and credited by bank, was accounted as a receipt in the
cash column of the cash book.
v. Other cheques for Rs. 8500 were deposited on 27 th March, 2023 but cheques for Rs. 6000 were
collected by the bank on 31st March, 2023 and remaining on 2nd April, 2023

Sum 17: Prepare a BRS as on 31st March, 2023 from the following information.
i. Bank balance as per pass book Rs. 25,000
ii. Cheque deposited into bank, but entry was not passed in the cash book. Rs. 1250
iii. Cheque received but not sent to bank Rs. 3000
iv. Credit side of the bank column cast short Rs. 500
v. Insurance premium was paid directly by the bank under the standing advice Rs. 1500
vi. Cheque issued but not presented for payment Rs. 1250
vii. Cheque discounted dishonoured not recorded in the cash book. Rs. 12,500
Sum 18: On 31st March, 2023, bank statement of Gurman shows credit balance of Rs. 33,570 whereas cash
book showed a debit balance of Rs. 53,000
i. Cheques and drafts sent to the bank but not collected and credited, amounted to Rs. 7900 while
cheque for Rs. 2000 was received unpaid.

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 ii. Three cheques drawn for Rs. 3000, Rs. 1500 and Rs. 2000 respectively were not presented for
payment till 30th April, 2023
iii. Bank has paid a cheque of Rs. 10,000 but it has not been entered in the cash book and a cheque
of Rs. 5000 which was discounted with the bank was dishonoured by the drawee on the due date.
iv. Bank has charged Rs. 130 as its commission for collecting outstation cheques and had credited
an interest of Rs. 100 in the account
v. A wrong debit of Rs. 5000 was made by the bank, which was reversed on 4th April, 2023.
Prepare BRS as on 31st March, 2023

When starting point is Overdraft/ Unfavourable balance as per bank statement/ pass book (Debit)
Sum 19: On 31st March, 2023, the bank pass book of Surya Enterprises showed an overdraft of Rs. 7700.
On the basis of the following particulars, prepare BRS:
i. Cheques issued before 31st March, 2023 but not yet presented for payment amounted to Rs. 3500
ii. Cheques paid into the bank but a cheque amounting to Rs. 2600 has not been collected yet.
iii. Interest on loan amounting to Rs. 554, debited by the bank was not recorded in the cash book
iv. A debtor deposited Rs. 4800 directly into the bank but the information was received on 3 rd April,
2023
v. Payment side of Cash Book was totalled Rs. 1000 short
Sum 20: From the following information provided by Gurman, prepare BRS as on 31st March, 2023:
i. Bank overdraft as per bank pass book Rs. 16,500
ii. Cheques issued but not presented for payment Rs. 8750
iii. Cheques deposited with the bank but not collected Rs. 30,500
iv. Cheques recorded in the cash book but not sent to the bank for collection Rs. 2000
v. Payments received from customers directly by the bank Rs. 3500
vi. Bank charges debited in the pass book Rs. 200
vii. Premium on life policy of Gurman paid by the bank on standing instructions Rs. 1980

Extra Practice Sums:

1. From the following particulars, prepare Bank Reconciliation Statement as on December 31, 2021:
i. Balance as per Cash Book Rs.4,200.
ii. Cheques issued but not presented for payment Rs.2,000.
iii. Cheques deposited but not collected Rs.3,000.
iv. Bank Charges debited by the Bank Rs.250

2. Prepare Bank Reconciliation statement as on March 31, 2021.

i. On this date the passbook of M/s BBA Industries showed a balance of Rs.27,500.
ii. Cheques of Rs.14,000 directly deposited by a customer.
iii. Cheques for Rs.13,500 were issued during the month of March but of these cheques for
Rs.1,500 were not presented by the end of March.
iv. The Bank collected Rs.2,500 as dividend on shares.

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 v. Cheques of Rs.17,500 were paid into bank but of Rs.8,500 were realised in the month of
April, 2021.

3. From the following particulars, ascertain the balance as would appear in the Pass Book of Ambani
Industrial works on 31st January, 2021.
i. Balance as per Cash Book on 31st January 2021 was Rs.4,000
ii. Cheques issued but not cashed prior to 31st January, 2010 amounted to Rs.1,000
iii. Cheques paid into Bank but not collected before 31st January amounted to Rs.800.
iv. There was a debit of Rs.400 for Bank charges in the Pass Book.

4. From the following particulars prepare Bank Reconciliation statement as on 31st March, 2021:
i. Overdraft as per Cash Book Rs.12,500.
ii. Cheques of Rs.18,000 were issued but were not presented for payment.
iii. Cheques of Rs.24,000 were paid into bank but wore not credited till 31 March 2021.
iv. Bank charges Rs.1,500.

5. You are required to prepare a Bank Reconciliation Statement as on June 30, 2021.
i. The bank column of a Cash Book showed a debit balance of Rs.1,49,000 on June 30, 2021.
Entries in the Cash Book and the Pass Book were compared and the following differences
were noticed:
ii. Cheques of Shyam Rs.9,000 and of Mohani Rs.15,000 were deposited but were not collected
upto June 30, 2021.
iii. Ram, a creditor, deposited a cheque of Rs.8,000 directly into the bank.
iv. Bank allowed an interest of Rs.1,500.
v. Cheque for Rs.10,000 issued to Radhey was not presented for payment.
vi. Bank debited the account by Rs.8,000, being insurance premium.
vii. Bank debited the account by Rs.700, being bank charges.

6. From the following particulars ascertain the balance that would appear in the Bank Pass Book of
Aman on 31st March, 2021.
i. The bank overdraft as per Cash Book on 31st March, 2021 Rs.60,200.
ii. Interest on overdraft for 6 months ending 31st March, 2021, Rs.10,000 entered in the Pass
Book.
iii. Bank charges of Rs.1,300 for the above period are debited in the Pass Book.
iv. Cheques issued but not cashed prior to 31st March, 2021, amounted to Rs.10,620.
v. Cheques paid into the bank but not cleared before 31st March, 2021, were for Rs.16,500.
vi. Interest on investment collected by the bank and credited in the Pass Book, Rs.11,000

7. From the following particulars, prepare a bank reconciliation statement as on 31-3-2021:

i. Balance as per pass book on 31st March, 2021 overdrawn Rs.10,266.
ii. Cheques drawn on 31st March, 2021 but not cleared till 2nd April, 2021, Rs.120; Rs.10,211;
Rs.981 and Rs.1,128.
iii. Interest on bank overdraft not entered in the cash book Rs.1,510.

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 iv. Out-station cheques for Rs.21,000 lodged in the bank on 30th March, 2021 but credited in
April, 2021.
v. Rs.100 being chamber of commerce subscription paid by the bank under a standing order on
31/3/ 2021 was not entered in the cash book.
vi. A hundi of Rs.2,500 due on 31st March, 2021 was sent to the bank for collection on 29th
March, 2021 and entered in the cash book forthwith, but the proceeds thereof were not
credited in the pass book till 2nd April, 2021.

12. Prepare a bank reconciliation statement from the following particulars:

i. On 31st December, 2016 ABC Brothers had overdraft of Rs.7500 as shown by the pass book.
ii. Company issued cheques amounting to Rs.2500 of which Rs. 2000 worth only seem to have
been presented for payment.
iii. Cheques amounting to Rs.100 had been paid in by the company on 30th December, but of
these only Rs.750 were credited in the pass book. Accountant also find that a cheque for
Rs.100 which he had debited to bank account in his books has been omitted to be banked.
iv. There is a debit in the pass book of Rs.250 for interest.
v. An entry of Rs.300 of a payment by a customer direct into the bank appears in the pass book.
vi. Pass book also shows a credit of Rs.600 to firm’s account for interest on investments directly
collected by bankers.

13. Find out the balance as per cash book and ascertain the correct balance of cash book as on 31-5-
2021.
i. The pass book of Rita & Sons showed a balance of Rs.8,500 on 31st May, 2021.
ii. Cheques amounting to Rs.2,750 were deposited into the bank on 27th May but Cheque worth
Rs.510 were credited on 2nd June and one cheque of Rs.150 was returned by them as dishonored
on 5th June.
iii. Cheques drawn but not presented for payment amounted to Rs. 6,000.
iv. A B/P paid by the bank but not entered in the cash book Rs.1,500.
v. Credit side of bank column of cash book was cast Rs.100 short.
vi. Preeti Bros. the firm’s agent were requested to remit Rs.4,000 through telegraphic transfer but
they have remitted only Rs.2,500 for which there was no entry in the cash book.

14. You are required to prepare a bank reconciliation statement.

i. On 30th June, 2021 the cash book of a merchant disclosed a balance of Rs.5,820. On
checking entries in the cash book with the bank statement, it was ascertained that:
ii. Cheque for Rs.2,200 deposited into bank, had not yet been cleared.
iii. Cheques issued but not presented for payment Rs.1, 600.
iv. A dividend of Rs.380 by collected to the bank had not been recorded in the cash book.
v. Bank charges Rs.40 have not been recorded in the cash book.
vi. A B/R of Rs.2,500 discounted with the bank is entered in the cash book without recording
the discount charge of Rs.100.
15. From the following particulars, prepare a bank reconciliation statement as on 31st March, 2021 and
show necessary adjustments in cash book to find out correct balance:

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 i. Bank balance as per pass book (overdraft) Rs.3,000.
ii. A cheque of Rs.2,000 was credited in the pass book on 28-3-2021, later dishonored and was
debited in the pass book on 1-4-2021. There was no entry of this dishonored cheque in the
cash book within the date.
iii. The bank collected Rs.1,000 by way of interest and credited the amount but the same was not
recorded in the cash book within 31st March, 2021.
iv. A cheque of Rs.25,000 was lodged in the bank on 31st March, 2021 but the same was
credited in the pass book only on 7th April, 2021.
v. Of the cheques drawn on 28th March, 2021 for Rs.8,000, a cheque of Rs.2,000 was presented
for payment on 7th April, 2021.
vi. On scrutiny it was further found that the banker has given a wrong credit for Rs.500 and a
wrong debit for Rs.200 in the pass book which have not been recorded in the cash book
within 31st March, 2021.

16. Tanishq Limited received its bank statement for the period ended 30th June 2021 but this does not
agree with the balance shown in the Cash Book of Rs. 29720 in Company’s favour. Examination of
the two records, revealed the following:
i. A deposit of Rs. 4920 paid in on 29th June 2021 had not been credited by the bank until 1st
July 2021.
ii. Bank charges amounting to Rs. 170 had not been entered in the Cash Book.
iii. A debit of Rs. 420 appeared on the bank statement for an unpaid cheque, which had been
returned marked “Out of date”. The cheque had been re-dated by the customer of Tanishq
Ltd. and paid into the bank again on 3rd July 2021.
iv. A standing order for payment of an annual subscription amounting to Rs. 100 had not been
entered in the Cash Book.
v. On 25th June, the Managing Director had given the cashier a cheque for Rs. 1000 to pay into
his personal account at the bank. The cashier had paid it into the company’s account by
mistake.
vi. On 27th June, two customers of Tanishq Ltd. had paid direct to the company’s bank account
Rs. 4990 and Rs. 1570 for goods supplied. The advices were not received by the company
until 1st July and were entered in the Cash Book under that date.
vii. On 30th March 2021, the company had entered into a hire purchase agreement to pay by
Banker’s order a sum of Rs. 260 on the 10th day of each month commencing from April. No
entries had been made in the Cash Book.
viii. Rs. 3640 paid into the Bank had been entered twice in cash book.
ix. Cheque issued amounted to Rs. 46,720 had not been presented to the bank for payment until
after 30th June.
x. A customer of the company, who received a cash discount of 2.5% on his account of Rs.
2000, paid the company a cheque on 10th June. The Cashier, in error, entered the gross
amount in the bank col. of the cash book.
You are required:
a. To show the necessary adjustments in the Cash Book of Tanishq Limited bringing down the
correct balance on 30th June 2021.

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 b. To prepare a reconciliation statement.

17. From the following particulars, ascertain the Bank Balance as per Pass Book as on 31st March 2021.
(a) without correcting the Cash Book balance and (b) after correcting the Cash Book balance
i. The bank Balance as per Cash Book on 31st March 2021 Rs.40,000
ii. Cheques issued but not encashed up to 31st March 2021 amounted to Rs.10,000
iii. Cheques paid into the bank but not cleared up to 31st March 2021 amounted to Rs.15,000
iv. Interest on Investments collected by the bank but not entered in the Cash Book Rs.500
v. Cheques deposited in the bank but not entered in Cash Book Rs.12,500
vi. Bank charges debited in Pass book but not entered in Cash Book Rs.100

Answers:
1. Balance as per Pass Book Rs.2,950.
2. 2.Balance as per Cash Book Rs.18,000.
3. 3. Balance as per Pass Book Rs.4,600.
4. Overdrafts per Pass Book Rs.20,000.
5. Balance as per Pass Book Rs.1,35,800.
6. Overdraft as per Pass Book Rs.66,380.
7. Overdrafts as per Cash Book Rs.2,404.8.
8. Overdrafts as per Cash Book Rs.8300.
9. Balance as per Cash Book Rs.2,260.
10. Balance as per Pass Book Rs.5,460.
11. Balance as per Cash Book Rs.19,300.
12. Balance as per Amended Cash Book Rs. 3154, Balance as per Pass Book Rs.7392.
13. Balance as per Amended Cash Book Rs. 52,000, Balance as per Pass Book Rs.47,900.

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