University:
University of Miami
Course:
ACC 211 | Principles of Financial Accounting
Academic year:

2022
Views:

274

Pages:

4
Author:

9LunarLullaby

Bank Reconciliations To know the concept we should know and Passbook. OF BRS Fint OF what is cashbook CashBook: Cashbook is mar prepared by trader OR Business entity. There are three types of CB. ② Simple CB - Cash column ② Two Column CB-Cash Bank ③Three column (B- Cash Bank/ Disc We concern with Bank column OF CIB which represents Banking transactions and at the end of particular period closing balance of this column represents Bank Balance Passbook: Passbook is prepared by Bank. There is an inverse relationship between CIB and P/B. It means. IF If we debit cheque received in CB then it is credited in plB. If we credit cheque issued in CIB then it is debited in PIB. SO Bank Balance as per CIB and PIB must be same. However due to certain reasons, there arises difference between Bank. Balance as per CIB and PIB. To know regions for the difference in bank balance as per clo and PIB, we Prepare Hatement which is called' Bank Reconuliation statement. Reasons For difference in Bank Balance as per CB and PIB:- 1 Timing Difference Con cheque received From Ram amounting to $1000 on 26.03. 2019 but not deposited Hll 31.3.2019 As cheque is received on 28.3. so it will be debited to Bank co of CIB as on 28.3.2019 SO Bank Bal will increase in clB by $1000. But As it is not yet deposited, Bank Balance will be lower by $1 as compared to clB as on 31.3.2019 2. Errors in CIB and/or P/B Examle:- Cheave received From Atul amounting to $1750. while recording in C/B. It is debited to Bank col. OF CIB. as $1570. This Cheave is duly deposited in bank and credited in PIB 9150. ↓ we can say in CIB we have recorded with $1570 whereas in elB. it is recorded by $ 1750. $180 as compared PlB.