The format of Bank Reconciliation Statement :

The format of Bank Reconciliation Statement when bank balance as per cash book is taken as the starting point.

Bank Reconciliation Statement as on …………………..

	Particulars	Amount  Rs.	Amount  Rs.
A.	Balance as per Cash Book		* *
B.	Add: Cheques issued but not presented for payment	* *
	Interest credited by bank but not recorded in cash book	* *
	Debtors directly paid into bank but not recorded in cash book	* *
	Wrong credit by banker	* *
	Collections by banker as per customer standing instructions	__ * *___
	Total (B)		___**__
C.	(Total A + B)		* *
D.	Less: Cheques deposited but not credited by the bank	* *
	Dishonoured cheques appeared in the pass book but not entered in the cash book	* *
	Bank charges as per pass book	* *
	Wrong debit by banker	* *
	Payments as per standing instructions	__* *__
	Total (D)		__* *__
E.	Balance as per pass book ( C- D )		* *

 

Points to be noted:

To work out the problems on Bank Reconciliation Statement, the following points are to be remembered.
i. The heading is given as “Bank Reconciliation Statement as on ____________”

ii. All items to be added are grouped together and shown in the inner column and the total is taken to the outer column for the purpose of addition (B ).

iii. All items to be deducted are grouped together in the inner column and the total can be shown in the outer column for deduction.(D).

iv. Favourable balance means the cash book will have a debit balance and the passbook will have a credit balance.

v. Bank overdraft or unfavourable balance means cash book will have a credit balance and passbook will have debit balance.

For easy reference the table given below will be useful.

Book	Favourable Balance	Unfavourable Balance (overdraft)
Cash	Debit	Credit
Pass	Credit	Debit

 

Illustration : When balance as per cash book is favourable. From the following details, make out a bank reconciliation statement
for M/s.Elavarasan & Company as on December 31, 2003 to find out the balance as per pass book.

Rs.

1. Cheques deposited but not yet collected by the bank                  1,500
2. Cheque issued to Mr.Raju has not yet been presented
for payment                                                                                                  2,500
3. Bank charges debited in the pass book                                                200
4. Interest allowed by the bank                                                                  100
5. Insurance premium directly paid by the bank as per
standing instructions                                                                                    500
6. Balance as per cash book                                                                         200

Solution

Bank Reconciliation Statement as on December 31, 2003

	Particulars	Amount Rs.	Amount Rs.
A	Balance as per Cash Book		200
B.	Add:     Cheques issued to Mr.Raju but not presented for payment	2,500
	Interest allowed by bank but not recorded in cash book	100
			2,600
C.			2,800
	Less: Cheques deposited but not credited by the bank	1,500
	Bank has paid insurance premium as per standing instructions	500
	Bank charges as per pass book	200
			2,200
D.	Balance as per Pass Book		600

 

Illustration : When balance as per pass book (favourable) is given

Mrs.Jame’s pass book showed a balance of Rs 25,000 on June 30, 2003. Her cash book shows a different balance. On examination, it is found that

1. No record has been made in the cash book for a dishonour of a cheque for Rs.250

2. Cheques paid into bank amounting to Rs. 3,500 were paid into the bank on June 28, 2003and the same had not been entered in the pass book.

3. Bank charges of Rs. 300 have not been entered in the cash book.

4. Cheques amounting to Rs. 9,000 issued to Ms.Devi has not been presented for payment still.

5. Mr. Balu who owed Rs. 3,000 has directly paid the sum into the bank account.

You are required to prepare a Bank reconciliation statement and ascertain the balance as per cash book.

Solution

Bank Reconciliation Statement as on June 30, 2003

Particulars	Amount    Rs.	Amount   Rs.
Balance as per Pass book		25,000
Add: Dishonour of cheque not recorded in cash book	250
Cheques paid into bank, not collected	3,500
Bank charges as per pass book not entered in the cash book	300
		4,050
		29,050
Less: Cheques issued but not presented for payment
	9,000
Amount directly paid by Mr.Balu into the bank	3,000
		12,000
Balance as per cash book		17,050

 

Illustration: When overdraft as per cash book is given

Prepare a Bank Reconciliation Statement as at June 30, 2003 for M/s.Jothi Sales Private Limited from the information given below

Rs.

1. Bank overdraft as per cash book                                                    1,10,450
2. Cheques issued on June 20, 2003 but not yet
presented for payment                                                                             15,000
3. Cheques deposited but not yet credited by bank                          22,750
4. Bills receivable directly collected by bank                                      47,200
5. Interest on overdraft debited by bank                                             12,115
6. Amount wrongly debited by bank                                                      2,400

Solution

Bank Reconciliation Statement as on June 30, 2003

Particulars	Amount   Rs.	Amount   Rs.
Overdraft balance as per cash book		1,10,450
Add: Cheques deposited but not yet credited	22,750
Interest on overdraft debited by bank	12,115
Wrong debit by bank	2,400
		37,265
		1,47,715
Less: Cheques issued but not presented for payment	15,000
Bills receivable collected by bank	47,200
		62,200
Overdraft balance as per bank pass book		85,515

 

Illustration : When overdraft as per Pass Book is given

Ms.Haritha gives you the following information regarding her bank account. It shows an overdraft balance of Rs.6,500 on March 31, 2003. This does not agree with the cash book balance.

1. Cheques amounting to Rs.15,000 were paid into bank out of which, only cheques amounting to Rs.4,500 were credited by the bank.

2. Cheques issued during March amounted in all to Rs.11,000, out of these, cheques amounting to Rs.3000 were unpaid till March 31, 2003.

3. The bank has wrongly debited account No.1 with Rs.500 in respect of a cheque drawn on account No.2.

4. The account stands debited with Rs.150 for interest and Rs.30 for bank charges.

5. The bank has paid the annual subscription of Rs.100 to club according to instructions.

You are required to ascertain balance as per cash book

Solution

Bank Reconciliation Statement as on March 31, 2003

Particulars	Amount   Rs.	Amount   Rs.
Overdraft balance as per pass book		6,500
Add: Cheques issued but not presented	3,000
		3,000
		9,500
Less Cheques paid into bank but not collected (Rs.15000-Rs.4500)	10,500
Wrong debit in pass book in account No.1 instead of account No.	2 500
Interest and bank charges not entered in the cash book (Rs.150+Rs.30)	180
Subscription paid as per standing instruction	__100__
		_11,280_
Balance as per cash book (Favourable)		-1,780

 

When an extract of cash book (bank column) and pass book is given.

Illustration : Given below are the entries in the bank column of the cash book and the pass book. Prepare a Bank Reconciliation Statement of Mr.Sekar as on August 31, 2003.

Cash Book
Dr.                                                                                                     (Bank Columns)                                                                                                       Cr.

Date	Particulars	Amount Rs.	Date	Particulars	Amount Rs.
2003			2003
Aug 1	To Balance b/d	20,525	Aug 8	By Kokila A/c	12,000
18	To Shanker A/c	6,943	26	By Geetha A/c	9,740
19	To Sales A/c	450	28	By Latha A/c	11,780
	(Raj an)		30	By Salaries A/c
20	To Commission			(Amala)	720
	A/c (Babu)	200	31	By Balance c/d	1,688
20	To Nirmala A/c	7,810			________
		35,928			35,928
Sept 1	To Balance b/d	1,688

 

Pass Book

Date	Particulars	1k Withdrawals Rs.	Cr. Deposits Rs.	Balance Dr./Cr. Rs.	Initials
1.8.03	By balance b/d			20,525 Cr
9.8.03	To Kokila	12,000		8,525 Cr
19.8.03	By Shankar		6,943	15,468 Cr
25.8.03	By Rajan		450	15,918 Cr
26.8.03	To Geetha	9,740		6,178 Cr
27.8.03	By Babu		200	6,378 Cr
28.8.03	To Amala	720		5,658 Cr
30.8.03	By B/R		20,000
	By Interest		25
	By Interest on
	Investment		1,820	27,503 Cr
31.8.03	To B/P	4,000		23,503 Cr

 

Solution :

In the above problem, an extract of the cash book (bank column) and the pass book of Mr.Sekar is given. The items given on the debit side of the cash book should match with the items given on the credit column of the pass book and vice versa. The items, which do not match, cause the difference between both the balances.

Bank Reconciliation Statement as on August 31, 2003

Particulars	Amount Rs.	Amount Rs.
Balance as per cash book Add:    Bills receivable collected, not entered		1,688
in cash book	20,000
Interest collected, not entered in cash book	25
Interest on investment collected, not entered in cash book	1,820
Cheques issued but not collected – Latha	11,780
		33,625
		35,313
Less: Cheques paid into bank, bu not collected  Nirmala	7,810
Bills payable paid, not entered in cash book	4,000
		11,810
Balance as per pass book		23,503