From the following information, ascertain the Cash Book balance .of Mr. Bajaj as on 31st March, 2021: (i) Debit balance as per Bank Pass Book ₹3,500. (ii) A cheque amounting to ₹2,500 deposited on 15th March, but the same was returned by the Bank on 24th March for which no entry was passed in the Cash Book. (iii) During March, two bills amounting to ₹2,500 and ₹ 500 were collected by the Bank but no entry was made in the Cash Book. (iv) A bill for ₹5,000 due from Mr Balaji previously discounted for ₹ 4,800 was dishonoured. The Bank debited the account, but no entry was passed in the Cash Book. (v) A Cheque for ₹ 1,500 was debited twice in the cash book. [July 2021, 5 Marks]

Pass the necessary Journal entries to rectify the following errors, using a Suspense Account: (i) Goods of the value of 500 returned by Mr. A were entered in the Sales Day Book and posted there from to the credit of his account; (ii) 250 entered in the Sales Returns Book, has been posted to the debit of Mr. R, who returned the goods; (iii) A sale of 700 made to Mr. Q was correctly entered in the Sales Day Book but wrongly posted to the debit of Mr. S as 70; (iv) The total of "Discount allowed" Column in the Cash Book for September amounting to 350 was not posted. [Sept. 2024, 4 Marks]

Meaning of Bank Reconciliation Statement.

Importance of bank reconciliation to an industrial unit. [RTP Jan 2025]

The interest charged by Banker to customer on overdrawn account is called Red ink interest.

Bank reconciliation statement is prepared to arrive at the bank balance.

Interest charged by the bank will be deducted, when the overdraft as per the cash book is the starting point for making the bank reconciliation statement.