Bank Reconciliation Statement is a record book of the transactions of a bank account. This statement helps the account holders to check and keep track of their funds and update the transaction record that they have made. Bank Reconciliation statement is also known as bank passbook. The balance mentioned in the bank passbook of the statement must tally with the balance mentioned in the cash book. In the statement, all the deposit will be shown in the credit column and withdrawals will be shown in the debit column. However, if the withdrawal exceeds deposit it will show a debit balance (overdraft). Show
Also Explore: Important Questions for Bank Reconciliation Statement Importance of Bank Reconciliation StatementGenerally while making a comparison between the company’s cash book and bank balance, the balance does not tally. Therefore, it is important to determine the cause for the difference and display them in the bank reconciliation statement and then tally the two balances. The bank reconciliation statement helps in explaining the differences in the amount between the company’s cash book and bank balance. The cash book and the bank passbook differences are caused by:
Additional Reading: DK Goel Solutions for Bank Reconciliation Statement Types of Bank Reconciliation StatementThe Bank Reconciliation Statement can be prepared in 2 ways:
Steps to Prepare Bank Reconciliation Statement:
Also Read: TS Grewal Solutions for Bank Reconciliation Statement Theory questions:
The above mentioned is the concept, that is elucidated in detail about ‘Bank Reconciliation Statement’ for the Commerce students. To know more, stay tuned to BYJU’S. What is the difference between bank balance and book balance?Book balance is a company's cash balance according to its accounting records. Book balance can include transactions that have yet to settle or clear through the bank account. At the end of an accounting period, a company's book balance is reconciled with the bank balance via the monthly bank statement.
What is difference between cash book and bank statement?What is the difference between cash book and a bank statement? Cash book is used to record all transactions for cash, checks, money orders, or postal order while a bank statement is the list of entries to each account holder that have been made in their personal account.
What is the difference between cash and bank balance?Cash book balance includes transactions that are not included in the bank balance. Bank statement balance includes transactions that are not included in the cash balance. Deposits in transit and outstanding checks are examples of transactions entered in the cash balance, but not in the bank balance.
What are the reasons of difference between cash book balance and bank statement?There are several reasons for this difference, which are as follows:. Outstanding checks. The company has issued checks that have not yet been presented to the bank for payment. ... . Deposits in transit. ... . Interest on deposited cash. ... . Bank service fees. ... . Check printing charges. ... . Bank error. ... . Company error.. |