Bank Reconciliation Statement

We may have four different situations while preparing the bank reconciliation . When debit balance (favourable balance) as per cash book is given and the balance as per passbook is to be ascertained. . When credit balance (favourable balance) as per passbook is given and the balance as per cash book is to be ascertained.

When credit balance as per cash book (unfavourable balance/overdraft balance) is given and the balance as per passbook is to ascertained. When debit balance as per passbook (unfavourable balance/overdraft balance) is given and the cash book balance as per is to ascertained. . .

(a) Dealing with favourable balances The following steps may be initiated to prepare the bank reconciliation The date on which the statement is prepared is written at the top, as part of the heading. (ii) The first item in the statement is generally the balance as shown by the cash book. Alternatively, the starting point can also be the balance as per passbook. (iii) The cheques deposited but not yet collected are deducted.

All the cheques issued but not yet presented for payment, amounts directly deposited in the bank account are added. All the items of charges such as interest on overdraft, payment by bank