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Bank Reconciliation Statement-2

 

Bank Reconciliation Statement -2        HS Commerce 


Before going to prepare reconciliation it is essential to know the accounting entry that is made while recording any transactions in the Cashbook. I think all are more or less acquitted with the transactions. I am telling it once again.

In every transaction, there are two sides one is either the bank accounts will be debiting or crediting by the business office as well as the bank. Hence there are two-part Debit and Credit. Suppose A cheque was deposited with a bank on 25.03.2021 for Rs.5000.00.

The entry will be Bank A/C Debit and Party or cash accounts Cr if double-entry contra type book is maintained I,e, you must debit the bank account. On another side after encashment of the cheque, the bank will credit the Bank accounts.

Now the difference in both the books only arises when one side entry is missed or entered wrongly.

Suppose in the above transaction at the time of deposition you have entered the entry by debiting the bank accounts but till 31.03.2021 bank has not collected the money of the cheque and thus not credited their bank account. Hence bank balance will differ due to not being recorded by the bank. I,e, in the transaction there is only debit by you and no credit by the bank yet. I think you have understood the situation. 

Another example, suppose a customer directly deposited with your bank accounts for Rs.5000.00 but due to information you have not yet recorded the same in the cash book. In that case, the bank will credit the bank  A/C but you have not debited your bank accounts as of 31.03.2021. So the difference is due to one side Credit entry at the bank.

So from the above clarification, it is clear that the difference of both the bank balance happens due to either one-sided debit or credit. Now preparation techniques will be discussed in the next class.

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