From the following particulars of M/s Iqbal enterprises, prepare a Banker reconcillation statement. (l) Bank overdraft as per Pass Book as on 31st March; 2024 was ₹8,800 (2) Cheques deposited in Bank for ₹5,800 but only ₹2,000 were cleared till 31st March. (3) Cheques issued were ₹2,500, ₹3,800 and ₹2,000 during the month. The cheque off 5,800 is still with supplier. (4) Dividend collected by Bank ₹1,250 was wrongly entered as ₹1,520 in Cash Book. (5) Corporation tax ₹1,200 paid by Bank as per standing instruction appears in Pass Book only. (6) Interest on overdraft ₹930 was debited by Bank in Pass Book and the information was received only on 3rd April 2024. (7) Direct deposit by M/ s Rajesh Trader ₹400 not entered in Cash Book. (8) Amount transferred from fixed deposit A/ c into the current A/ c ₹2,000 appeared only.in Pass Book. [RTP Jan. 2025]

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.