Bank Reconciliation Statement :

The bank pass book and bank columns of the cash book record the same transactions. In the pass book, the transactions are recorded from the point of view of the bank whereas in cash book they are recorded from thepoint of view of the client. The bank balance as per pass book, can therefore, be expected to be equal to the bank balance as revealed by the cash book. However, in actual practice the two balances rarely agree because of the time-lag of a few days between the entries made by the firm in cash book and by the bank in the pass book. Thus, a comparison is necessary to find out the items on account of which difference has arisen and a need to reconcile the two balances. Thus, a bank reconciliation statement is a statement which is prepared as on a particular date to reconcile the bank balance as per cash book with balance as per pass book by showing all causes of difference between the two.