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Preparation Of Bank reconciliation statement

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The following procedures are followed while preparing the bank reconciliation statement:

* Compare cash book and pass book items.

* Give sign to all the items of cash book and pass book which are matched with each other.

* Make a list of unmatched items found in cash book and pass book.

* Prepare bank reconciliation statement taking balance either from cash book or pass book as a basis.

* Adjust the items which cause the disagreement in the balances. Add the items which have decreased the balance on the book with which reconciliation is to be made. On the contrary subtract the amount of those items which have increased the balance.

These procedures should be followed only when the cash book and pass book are to be compared. But if causes of differences are already given, the above procedures need not be followed.

If the causes of disagreement between the cash book and pass book balances are given, the bank reconciliation statement can be prepared either by taking the balance of cash book or pass book. The bank reconciliation statement can be prepared by using either of the following bases.

* Debit balance shown by cash book

* Credit balance shown by cash book (bank overdraft)

* Credit balance shown by pass book

* Debit balance shown by pass book (bank overdraft)

Related Topics
Concept And Meaning Of Bank Reconciliation Statement
Needs And Importance Of Bank Reconciliation Statement
Reasons For Disagreement Between Cash Book And Pass Book Balances

2 comments:

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