Procedure for Preparing Bank Reconciliation Statement

S.No	Transactions	Entries by customer in the cash book (Bank column)	Entries by Bank in the pass book	Effect	Procedure to ascertain the balance as per pass book from cash book
S.No	Transactions	Entries by customer in the cash book (Bank column)	Entries by Bank in the pass book	Effect	Favourable balance	Unfavou -rable balance (over–draft)
1.	When cash is deposited	Customer enters in the debit side	Bank enters in the credit column	Cash book =Pass book	—	—
2.	When cash is withdrawn	Customer enters in the credit side	Bank enters in debit column	Cash book =Pass book	—	—
3.	Issue of cheque	Customer enters in the credit side immediately	Bank enters in the debit column only on the date when presented for payment	Cash book <Pass book	Add	Less

4.	Cheque received and entered in cash book and sent to bank for collection	Customer debits cash book	Only after collection, the amount will be entered in the credit column of the pass book because the process takes some time	Cash book >Pass book	Less	Add
5.	Bank charges for services rendered by bank	No entry can be found in cash book till the pass book is verified.	Entered in the debit column of the passbook immediately.	Cash book >Pass book	Less	Add
6.	Interest, dividend etc collected by bank on behalf of customer	No entry can be found in cash book till the pass book is verified.	These are entered in the credit column of the passbook immediately after receiving the amount	Cash book <Pass book	Add	Less
7.	Interest allowed by bank	No entry is made unless pass book is verified.	Entered in the credit column of the pass book first.	Cash book <Pass book	Add	Less
8.	Amount directly remitted into bank	No entry is found in cash book till the pass book is verified.	Entered in the credit column of the pass book on the same day of receipt.	Cash book <Pass book	Add	Less

9.	Subscription, premium etc paid by the banker as per the standing instructions of the customer	Entry is made only after the pass book is verified.	Entered in the debit column of the pass book on the same day of payment	Cash book >Pass book	Less	Add
10.	Dishonour of bills receivable or cheques paid into bank	No entry in the cash book till the customer is intimated by the banker	Entered in the debit column of the pass book immediately	Cash book >Pass book	Less	Add
11.	Dishonour of bills payable or cheques issued	No entry in the cash book till the customer is intimated by the banker	Entered in the credit column of the pass book immediately	Cash book <Pass book	Add	Less
12.	Wrong credit in the pass book	No entry is found in cash book unless it is verified with the pass book.	Entered (wrongly) in the credit column in the pass book	Cash book <Pass book	Add	Less
13.	Wrong debit in the pass book	No entry is found in cash book unless it is verified.	Entered (wrongly) in the debit column in the pass book	Cash book >Pass book	Less	Add