1 of 13

CHAPTER 5�Bank Reconciliation Statement

2 of 13

Reasons for Differences in Cash Book and Pass Book

The bank balance is shown in the cash book and the bank statement seldom agree.There are various reasons for this. A statement is used to reconcile the two balances.

​

​

3 of 13

REASONS

  • Cheque issued but not presented for payment
  • Cheque deposited but not cleared

4 of 13

REASONS

  • SERVICE CHARGES
  • They are charges made by the bank to the company of banking services used .
  • Dishonored cheques/NFS cheques
  • They are cheques deposited but subsequently retured by the bank due to the failure of the drawer to pay.

5 of 13

REASONS

  • Interest allowed by the bank
  • They are interest received for deposits or fixed deposits.
  • Miscellaneous bank charges and credits
  • Bank charge for services – such as printing cheques, handling collection of notes receivable and processing NSF cheques.

6 of 13

Unpresented cheques

Cheque issued but not presented for payment

​

  • Cheques drawn but not encashed.
  • Cheques paid for payment but not cleared.
  • Cheques issued returned by bank on technical ground.

DR + -

DR + -

DR + -

DR + -

7 of 13

Uncredited cheques

  • Cheques deposite but not credited by the bank.
  • Cheques paid into bank but not cleared by the bank.
  • Cheques sent to bank but not cleared by the bank.
  • CR - +
  • CR - +
  • CR - +

​

8 of 13

All types of income

  • Income given by bank.
  • Income collected by bank
  • DR + -
  • DR + -

​

9 of 13

Dishonored cheque

  • CHEQUES RECEIVED AND DEPOSITED BUT DISHONOR .
  • CHEQUES ISSUED BUT DISHONORED.

​

  • CR - +
  • DR + -

​

10 of 13

Wrong debit or credit

  • If anything CR. in bank statement only.
  • If anything DR. In bank statement only.

​

  • DR + -
  • CR - +

​

11 of 13

Overstated/overcast

  • Payment side of cashbook is overstated.
  • Receipts side of cashbook is overstated.
  • DR + -
  • CR - +

12 of 13

Expense or other charges

  • Expenses paid by bank.
  • Expences charged by bank.
  • Insurance premium paid.
  • Interest charged by bank on overdraft.

CR - +

CR - +

CR - +

CR - +

​

​

​

​

13 of 13

THANK YOU