collected, not entered in cash book , Cheques issued but not presented – Mala , , , Less: Cheques deposited into bank, but not yet collected –Nirmala , Bills payable paid, not entered in cash book , , Balance as per bank statement , . . Plus or Minus presentation Bank reconciliation statement can also be presented in an alternative method. In such presentation, two columns are given, one to record items that increase the balance (plus items) and the other one to record items that decrease the balance (minus items).
Balances as per the cash book or bank statement are written as the starting balance. *Note: Students will be tested on balance presentation method only. Accountancy - Banks provide facility to maintain savings bank account for individuals and trusts. Banks allow interest for such accounts.
In such cases, adjustments need to be made in bank reconciliation statement for interest allowed by the bank on savings bank account. Debit balance as per cash book is favourable Credit balance as per bank column of the cash book is an overdraft Debit balance as per bank statement is unfavourable Credit balance as per bank statement is favourable Bank reconciliation statement is prepared by the business entity The purpose of preparing bank reconciliation statement is to explain the causes of disagreement between balance as per bank column of cash book and bank statement Most of the differences are caused by differences in the time at which items are recorded. Some items cannot be recorded in the bank column of the cash book until the bank statement is received. Points to remember Self-examination questions I Multiple choice questions Choose the correct answer .
A bank reconciliation statement is prepared by (a) Bank (b) Business (c) Debtor to the business (d) Creditor to the business . A bank reconciliation statement is prepared with the help of (a) Bank statement (b) Cash book (c) Bank statement and bank column of the cash book (d) Petty cash book . Debit balance in the bank column of the cash book means (a) Credit