BANK RECONCILIATION STATEMENT

Meaning : Pass book is your Banker’s Statement where entries recorded as per your Bank Records. Cash book is your own record of Bank transactions. Often we find mismatch between our records and bank records. To reconcile or match these two records we prepare Bank Reconciliation Statement. This statement will start with either our balance or banker’s balance and end with banker’s balance or our balance respectively. The common reasons for mismatch would be the time lag due to cheques clearing formalities, Bank charges automatically debited, etc.,

Format of Bank Reconciliation Statement

Balance as per Pass Book

Add :

·         Cheques deposited but not yet presented and credited.

·         Insurance Premium paid and bank charges entered in pass book but not recorded in cash book.

·         Interest debited in pass book but not yet recorded in cash book

·         Payments like telephone charges or to Creditors made directly by the bank but not entered in cash book

·         Wrong Debit made in the pass book or wrong credit made in the cash book.

Less :

·         Cheques issued but not yet presented.

·         Interest credited by the bank but not credited in the cash book

·         Dividend, Interest, etc. received directly by the bank on behalf of the client.

·         Direct receipts from Customers to the bank.

·         Wrong credit made in the pass book or wrong debit made in the cash book.

Balance as per Cash Book

Alternative Method :

Balance as per Cash book

Less:

·         Cheques deposited but not yet presented and credited.

·         Insurance Premium paid and bank charges entered in pass book but not recorded in cash book.

·         Interest debited in pass book but not yet recorded in cash book

·         Payments like telephone charges or to Creditors made directly by the bank but not entered in cash book.

·         Wrong Debit made in the pass book or wrong credit made in the cash book.

Add:

·         Cheques issued but not yet presented.

·         Interest credited by the bank but not credited in the cash book

·         Dividend , Interest, etc. received directly by the bank on behalf of the client.

·         Direct receipts from Customers to the bank.

·         Wrong credit made in the pass book or wrong debit made in the cash book.

Balance as per Pass Book