, , , , , , − , * Note: Since the balance obtained is negative, it is favourable balance. Accountancy - Student activity Think: In the above illustration, what will be the cash book balance, if the balance as per bank statement is favourable? Illustration The bank statement of Sudha and Company showed an overdraft of ` , on 31st December, , prepare a bank reconciliation statement. (a) A cheque deposited on 30th December for ` , was not credited by the bank.
(b) Interest on term loan ` was debited by bank on 31st December, but not accounted in the books of Sudha and Company. (c) A cheque issued for ` on 24th December, was paid by the bank. It was recorded as ` in the bank column of the cash book. (d) One outgoing cheque on 27th December, of ` was recorded twice in the cash book.
(e) Bank recorded a cash deposit of ` , as ` , . (f) A sum of ` , deposited in cash deposit machine by a customer of the business on 31st December, was not recorded in the books of Sudha and Company. (g) Interest on overdraft of ` was not recorded in the books of Sudha and Company. (h) Two cheques issued on 29th December, for ` and ` , but only the first cheque was presented for payment before 31st December, .
Solution Bank reconciliation statement of Sudha and Company as on 31st December, Amount ` Amount ` Overdraft as per bank statement (debit balance) Add: Cheque issued recorded twice in cash book Direct cash deposit not entered in cash book Unpresented cheque Less: Cheque deposited but not credited by bank Interest on term loan not entered in cash book Cheque issued amount entered lesser in cash book ( - ) Cash deposit recorded lesser in bank statement ( , - , ) Interest on overdraft not entered in cash book Favourable balance as per cash book* , , ,