Bank reconciliation statement PART -I Class HS Accounts
Bank reconciliation statement is very important in the business
world, at the end of each month it is prepared to justify the bank balance as
per the books of accounts i.e., bank book maintain by the business office on
daily basis with the bank book maintained by the bank itself for the
transaction maintained for their client.
Bank book maintain by the business office is generally known as
Cashbook and bank book maintain by the bank are known as Passbook.
Suppose at the end of March 31.03.2021, the cash book showing a
balance of Rs.10000.00 dr. i.e. bank balance in favor of the business
Rs.10000.00. Now the bank will also supply a balance in that accounts as on
31.03.2021 along with a bank statement, where the bank balance showing as
Rs.60000.00 cr I,e, a balance in the account in favor of the business
Rs.60000.00
We can see that both the balance is different, now bank
reconciliation will help us to reconcile those differences and make both the
balance equal.
Now we have to understand the nature of (debit)dr and (credit)cr
balance as per cash book and pass book respectively.
1.
Bank balance as per pass book cr means there is a bank balance
in favor of the business.
2.
Bank balance as per Cashbook dr means there is a bank balance
in favor of the business.
3.
Bank balance as per pass book dr means there is a negative bank
balance(overdrawn) in the name of the business.
4.
Bank balance as per Cashbook cr means there is a negative bank
balance(overdrawn) in the name of the business.
So the above four types of balance can only occur.
Please try to understand the above details before going to
prepare a bank reconciliation statement. After that, I will discuss the BR's
preparation in detail in the next class and post. Thanks for reading and if any
question is there you can ask.
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