Bank Reconciliation Statement

immediately recorded in the debit side of the cash book. This increases the bank balance as per the cash book. However, the bank credits the customer account only when the amount of cheques are actually realised. The clearing of cheques generally takes few days especially in case of outstation cheques or when the cheques are paid-in at a bank branch other than the one at which the account of the firm is maintained.

This leads to a cause of difference between the bank balance shown by the cash book and the balance shown by the bank passbook. . . (c) Direct debits made by the bank on behalf of the customer Sometimes, the bank deducts amount for various services from the account without the firm’s knowledge.

The firm comes to know about it only when the bank statement arrives. Examples of such deductions include: cheque collection charges, incidental charges, interest on overdraft, unpaid cheques deducted by the bank – i.e. stopped or bounced, etc. As a result, the balance as per passbook will be less than the balance as per cash book.

. . (d) Amounts directly deposited in the bank account There are instances when debtors(customers) directly deposits money into firm’s bank account. But, the firm does not receive the intimation from any source till