Bank Reconciliation Statement (BRS) is prepared to reconcile the balance shown in the cash book with the balance shown in the pass book (bank statement). The differences can arise due to various reasons, such as outstanding checks, deposits in transit, errors, or bank charges.
Problem 1:
Bank balance as per Pass Book: ₹10,000
Bank balance as per Cash Book: ₹8,500
The following transactions are to be considered:
- Outstanding Cheques: ₹1,200
- Deposits in Transit: ₹500
- Bank Charges (not recorded in Cash Book): ₹50
- Cheque recorded in Cash Book but not presented to the bank: ₹1,000
Solution: We need to adjust the cash book and pass book balances to match them.
Bank Reconciliation Statement
As of 31st December 2024
Particulars | Amount (₹) |
---|---|
Bank Balance as per Pass Book | 10,000 |
Add: Deposits in Transit | 500 |
Less: Outstanding Cheques | (1,200) |
Adjusted Bank Balance (Pass Book) | 9,300 |
Bank Balance as per Cash Book | 8,500 |
Add: Bank Charges (Deducted in Pass Book) | 50 |
Less: Cheque not presented to the bank | (1,000) |
Adjusted Cash Book Balance | 9,300 |
Conclusion: The adjusted balance as per both the pass book and the cash book is ₹9,300, after considering the adjustments.
Problem 2:
Bank balance as per Pass Book: ₹20,000
Bank balance as per Cash Book: ₹18,500
The following transactions are noted:
- Outstanding Cheques: ₹3,000
- Deposits in Transit: ₹1,500
- Bank Charges (not recorded in Cash Book): ₹200
- Bank Interest credited (not recorded in Cash Book): ₹300
Solution:
Bank Reconciliation Statement
As of 31st December 2024
Particulars | Amount (₹) |
---|---|
Bank Balance as per Pass Book | 20,000 |
Add: Deposits in Transit | 1,500 |
Add: Bank Interest credited | 300 |
Less: Outstanding Cheques | (3,000) |
Adjusted Bank Balance (Pass Book) | 18,800 |
Bank Balance as per Cash Book | 18,500 |
Less: Bank Charges (Deducted in Pass Book) | (200) |
Adjusted Cash Book Balance | 18,800 |
Conclusion: After adjustments, the reconciled balance in both the cash book and the pass book is ₹18,800.
Key Points to Remember:
- Deposits in Transit are added to the pass book balance, as they have been recorded in the cash book but not yet reflected in the pass book.
- Outstanding Cheques are subtracted from the pass book balance, as they have been recorded in the cash book but not yet cleared by the bank.
- Bank Charges and Bank Interest are adjusted based on the pass book and added to or deducted from the cash book, depending on the nature of the entry.
- Cheques not presented for payment are also adjusted when reconciling the cash book and pass book balances.