Bank Reconciliation Example covered in this Note, lists various cases when there is a difference between the Cash Book and the Bank Pass Book and how they are reconciled. This can be for various reasons which are discussed in this Note.
Favourable balance as per the cash book-cheque directly deposited into bank
Bank Reconciliation Example 1 :
If the Balance as per Cash Book is a (Dr.) of Rs. 18000 , cheque of Rs. 4500 directly deposited by a customer into the Bank would result an/a __________ in Dr. balance ?
Explanation:
When a Cheque is directly deposited by a debtor into the bank, the balance as per the bank would increase on collection of such cheque.
However, if such cheque deposit is not recorded in the cash book, the cash book balance would not be impacted.
Since cheque deposit would increase Bank balance, Cheque directly deposited by a debtor into the bank would be added to the Cash Book Balance to bring it at equal to the balance as per the pass book.
Favourable balance as per the cash book-cheque issued but not presented for payment
Bank Reconciliation Example 2 :
If the Balance as per Cash Book is a (Dr.) of Rs. 10000 , cheque of Rs. 4000 issued, but not presented for payment would result an/a ________ in Dr. balance ?
Explanation:
When a Cheques is issued by the company, it reduces it from its Bank Balance. However, if such cheque is not presented for payment , this implies that the same has not been reduced by the bank from its balance.
When starting with the Dr. Balance of Cash Book, Cheques issued but not presented for payment , would be added back to the Dr. balance. This would make the balance as per Cash Book to an amount, which would have been if such cheque were not issued at all .
Favourable balance as per the cash book-interest allowed by the bank not recorded
Bank Reconciliation Example 3 :
If the Balance as per Cash Book is a (Dr.) of Rs. 10000 , interest of Rs. 3500 ,allowed by the Bank would result an/a -__________ in Dr. balance ?
Explanation:
When interest is allowed by the Bank, the balance as per the Pass Book would have increased on allowance of such interest.
However, if such interest is not recorded in the cash book, the cash book balance would remain the same, although it should have increased.
To reconcile the two, such interest would be added to the Cash Book balance to bring it at par with balance as per the pass book.
Favourable balance as per the cash book-dividend collected by the bank not recorded in the cash book
Bank Reconciliation Example 4 :
If the Balance as per Cash Book is a (Dr.) of Rs. 11000 , dividend collected by the Bank of Rs. 2200 not recorded in the Cash Book would result an/a _________ in Dr. balance ?
Explanation:
When Dividend is collected by the bank, but not recorded in the books of recipient, the balance as per the Pass Book would have increased on collection of such dividend.
However, if such collection is not recorded in the cash book, the cash book balance would remain the same, although it should have increased.
To reconcile the two, such collection would be added to the Cash Book balance to bring it at par with balance as per the pass book.
Favourable balance as per the cash book-wrong credit granted by the bank
Bank Reconciliation Example 5:
If the Balance as per Cash Book is a (Dr.) of Rs. 11000 , wrong credit of Rs. 3300 by the bank would result an/a __________ in Dr. balance ?
Explanation:
When a Wrong credit is granted by the bank, the balance as per the bank would have increased on such credit.
However, if such Credit is not recorded in the cash book, the cash book balance would not be impacted and remain the same.
Since this is a wrong credit, cheque deposit would increase Bank balance, Wrong credit granted by the bank would be added to the Cash Book Balance to bring it at equal to the balance as per the pass book.
To reconcile the two, such credit would be added to the Cash Book balance to bring it at par with balance as per the pass book.
However, no entry would be recorded in the books of account for such wrong credit granted by the bank.
Favourable balance as per the cash book-cheque deposited but not recorded
Bank Reconciliation Example 6 :
If the Balance as per Cash Book is a (Dr.) of Rs. 10000 , cheque of Rs. 1000 deposited into the Bank, but not recorded in the Cash Book would result an/a ___________ in Dr. balance ?
Explanation:
When a Cheque is deposited but not recorded, the balance as per the bank would have increased on collection of such cheque.
However, if such deposit is not recorded in the cash book, the cash book balance would remain the same, although it should have increased.
To reconcile the two, such deposit would be added to the Cash Book balance to bring it at par with balance as per the pass book.
Favourable balance as per the cash book-cheque deposited but not collected (credited) by the bank
Bank Reconciliation Example 7:
If the Balance as per Cash Book is a (Dr.) of Rs. 11000 , cheque of Rs. 2400 deposited into the Bank,but not collected by Bank would result an/a ___________ in Dr. balance ?
Explanation:
When a Cheque is deposited but not collected by the bank, the balance as per the Cash Book would have increased on deposit of such cheque.
However, if such cheque is not collected by the bank, the Pass book balance would remain the same.
To reconcile the two, such deposit would be reduced from Cash Book balance to bring it at par with balance as per the pass book.
Favourable balance as per the cash book-cheque or bill of exchange dishonoured
Bank Reconciliation Example 8 :
If the Balance as per Cash Book is a (Dr.) of Rs. 11000 , cheque of Rs. 5000 which is dishonoured due to insufficient fund would result an/a ____________ in Dr. balance ?
Explanation:
When a Cheque or bill of exchange dishonored, the balance as per the Pass Book would have remained the same and not increased.
However, as such cheque is considered as collected, it would have increased the Cash book balance.
To reconcile the two, such deposit would be reduced from Cash Book balance to bring it at par with balance as per the Pass book.
Favourable balance as per the cash book-bank charges
Bank Reconciliation Example 9 :
If the Balance as per Cash Book is a (Dr.) of Rs. 10000 , Bank charges of Rs. 2500 not recorded in the Cash Book would result an/a _______________ in Dr. balance ?
Explanation:
When the Bank Debits Bank charges, the balance as per the Pass Book would have reduced.
However, as such charges are not considered in Cash Book, the Cash book balance would have remained the same.
To reconcile the two, such charges would be reduced from Cash Book balance to bring it at par with balance as per the Pass book.
Favourable balance as per the cash book-interest charged by the bank
Bank Reconciliation Example 10 :
If the Balance as per Cash Book is a (Dr.) of Rs. 14500 , interest charges of Rs. 1120 of Bank not recorded in the Cash Book would result an/a ____________ in Dr. balance ?
Explanation:
When the Bank Debits Interest, the balance as per the Pass Book would have reduced.
However, as such interest charges are not considered in Cash Book, the Cash book balance would have remained the same.
To reconcile the two, such interest charges would be reduced from Cash Book balance to bring it at par with balance as per the Pass book.
Favourable balance as per the cash book-direct payment made by the bank
Bank Reconciliation Example 11 :
If the Balance as per Cash Book is a (Dr.) of Rs. 70000 , direct payment of Rs. 12000 by the Bank would result an/a _____________ in Dr. balance ?
Explanation:
When the Bank makes direct payments, the balance as per the Pass Book would have reduced.
However, as such payments are not considered in Cash Book, the Cash book balance would have remained the same.
To reconcile the two, such payments would be reduced from Cash Book balance to bring it at par with balance as per the Pass book.
Favourable balance as per the cash book-wrongly debited by the bank
Bank Reconciliation Example 12 :
If the Balance as per Cash Book is a (Dr.) of Rs. 12000 , amount of Rs. 2400 wrongly debited by the Bank would result an/a __________ in Dr. balance ?
Explanation:
When the Bank makes wrong debit, the balance as per the Pass Book would have reduced.
However, as such debits are not considered in Cash Book, the Cash book balance would have remained the same.
To reconcile the two, such charges would be reduced from Cash Book balance to bring it at par with balance as per the Pass book.
However, no entry is not recorded in the books of accounts for wrong debit made by the bank.
Favourable balance as per the cash book-cheque recorded but not deposited
Bank Reconciliation Example 13 :
If the Balance as per Cash Book is a (Dr.) of Rs. 12000 , cheque of Rs. 6000 recorded in the Cash Book but not deposited in Bank would result an/a ______________ in Dr. balance ?
Explanation:
When the Cheques are recorded in the books of account, but not deposited , the debit balance as per the Cash Book would have increased.
However, as such debits are not considered in Pass Book, the Pass book balance would have remained the same.
To reconcile the two, such cheques would be reduced from Cash Book balance to bring it at par with balance as per the Pass book.
