Meaning of Bank Reconciliation Statement.

Question

Accepted Answer

Answer Solution: Meaning of Bank Reconciliation Statement A bank A/ c or bank book is maintained by us to record the transactions with bank. Similarly bank maintains our A/ c in their books. A copy of which is given to us known as bank statement or passbook. All the transactions recorded by us will be recorded by bank also, therefore normally the balance shown by the two books must be same and should be opposite balance. But practically this balances at a particular time (i.e. on a particular date) doesn't tally because there is always some time gap between recording of the same transaction by us and by bank. To find out the causes of difference, we prepare a Bank Reconciliation Statement (BRS). The items which comes in Reconciliation statement, can be grouped in following 4 categories: • 1. Items recorded by bank but not recorded in our books. Ex.: a. Bank charges charged by Bank b. Interest credited by Bank 2. Recorded by us but not recorded by bank. (Bank will record at a latter date). Ex. a. Cheque deposited but not yet realised b. Cheque issued but not yet paid by Bank 3. Errors committed in our books ( i.e. in cash book - bank column). Ex. a. Totalling, balancing error b. Cheque deposited & returned dishonoured but not yet reversed. 4. Errors committed by bank (i.e. in pass book). Ex. a. Totalling, balancing error b. An item of some other person debited or credited to our A/ c.

Meaning of Bank Reconciliation Statement.

Detailed Solution & Explanation

About This Chapter: BRS & Inventories

Related Comparison Tables

More Questions from Bank Reconciliation Statement

Ready to Master Bank Reconciliation Statement?