cash book If answer is positive, then unfavourabe balance (Cr.) as per cash book and If, negative then favorable balance (Dr.) as per cash book Student activity Think: Remember, an item entered on the debit side of cash book is entered on the credit side of bank statement and vice-versa. Now, keep this in mind, think on the following: Is it possible to prepare bank reconciliation statement with bank statement as starting point and ascertain the cash book balance? Prepare a specimen of bank reconciliation statement with balance as per bank statement as the starting point. Accountancy - When balances of cash book and/or bank statement is given: Illustration (When balance as per cash book is favourable) From the following information, prepare bank reconciliation statement to find out balance as per bank statement on 31st March, .
(i) Cheques deposited but not yet collected by the bank (ii) Cheque issued but not yet presented for payment , (iii) Bank interest charged (iv) Rent paid by bank as per standing instruction (v) Cash book balance Solution Bank reconciliation statement as on 31st March, Amount ` Amount ` Balance as per cash book Add: Cheque issued but not yet presented for payment , , Less: Cheques deposited but not yet collected by the bank Bank interest charged Rent paid by bank as per standing instruction Balance as per bank statement Student activity Think: In the above illustration, what will be the bank statement balance if the cash book balance is unfavourable? Illustration On 31st March, , the bank column of the cash book of Senthamarai Traders showed a debit balance of ` , . On examining the cash book and the bank statement, it was found that: (a) A cheque for ` , deposited on 29th March, was credited by the bank only on 4th April, . (b) A payment made through net banking for ` has been entered twice in the cash book.