BANK RECONCILLIATION STATEMENT

SECTION-A  THEORY

1. State the need of preparation of Bank Reconciliation Statement.

2. What is a bank overdraft?

3. State any two causes of difference occurred due to the transactions recorded by the bank.

4. What does the favourable balance in pass book indicate?

5. By whom is the bank reconciliation statement prepared?

6. State any two causes of difference occurred due to the transactions recorded by the bank.

7. State whether BRS is a statement or an account.

8. When bank column of a cash book shows a credit balance, what does it mean?

9. Is a bank reconciliation statement, a part of double entry system?

10. Briefly explain the statement “wrongly debited by the bank” with the help of an example.

SECTION-B  PRACTICAL

1.       From the following information supplied by Mr. Abhimanyu, prepare his BRS as on 31 December,2015.

S.No.	Particulars	Amount(Rs.)
1.	Bank overdraft as per pass book	16,500
2.	Cheques issued but not presented for payment	8,750
3.	Cheques deposited in the bank but not collected	10,500
4.	Cheques recorded in the cash book but not sent to bank for collection	2,000
5.	Payment received from customer directly by the bank	3,500
6.	Bank charges deposited in the pass book	200
7.	Premium on life policy of Abhimanyu paid by the bank on standing advice	1,980
8.	A bill for Rs. 3000(discounted with the bank in november) dishonoured on 31 dec,2013 and noting charges paid by bank	100

2.       The pass book of Mr. Mohit current account showed a credit balance of Rs.20,000, on dated 31 December, 2010. Prepare a BRS .

i.                     A cheque of Rs. 400 drawn on his saving account has been shown on current account.

ii.                   He issued two cheques of Rs.300 and Rs.500 on 25 Dec but only the 1^st cheque was presented for payment.

iii.                  One cheque issued by Mr. Mohit Of Rs.500 on 27^th September but it was not presented for payment whereas it was recorded twice in the cash book.

3.       The(Debit) balance at bank in Rahul’s cash book on 30 April,2015 is Rs.37,380. However a cheque of Rs.43,410 received from Mahesh and a cheque  of Rs.5220 paid to A appear in the cash book, but not on the bank statement.

Bank charges of Rs.13,500 have not been entered in the cash book. What is the balance in the bank statement on 31 Aprol,2015.

4.        The following facts relate to the business of Rajverr who requires you to reconcile his cash book with the pass book balance.

Balance as per cash book(credit)	2800
Unpresented cheques	3440
Uncredited cheques	2260

Additional Information

i.                    The debit side of the cash book(bank column) has been undercast by Rs.500.

ii.                  A cheque of Rs. 200 paid to a creditor has been entered by mistake in the cash column.

iii.                Bank charges Rs.80 have not been entered in the cash book.

5.       Prepare BRS as on 31^st December,2015 from the following transactions:

i.                     A’s overdraft as per pass book Rs.12000 as on 31 December.

ii.                   On 30 December, cheques had been issued for Rs.70,000 of which cheques worth Rs.3,000 only had been encashed upto  31^st December.

iii.                  Cheques amounted to Rs.3500 had been paid into the bank for collection but out of these only Rs.500 had been credited in the pass book.

iv.                 The bank has charged Rs.500 as interest on overdraft and the intimation of which has been received on 2 Jan,2016.

v.                   Bank has collected Rs.600 directly in respect of intrest on A’s investment. A has no knowledge of it.

vi.                 A cheque  for Rs.200 has been debited in bank column of cash book by A but it was not sent to bank for collection at all.

6.       The cash book of Sharma showed a balance of Rs.26,900 on 31^st Dec at the bank. The figure did not agree with the bank pass book. A comparison of the two revealed the following:

i.                     The bank has debited Sharma with Rs.4800 the annual premium on life policy according to his standing instructions and with Rs. 150 as bank intrest.

ii.                   The bank has credited Sharma by Rs.7000 the proceeds of a bill.

iii.                  Sharma paid in cheques totaling Rs. 10,500 on 26 December , of which those for Rs7800 were collected in December and one of Rs.750 was returned as dishonoured, the information of which was received on 2 Jan.

iv.                 The cash collection on 21 December totaling Rs. 3050 entered in the cash book in the bank column on the same day but was banked on 2Jan.

v.                   In December, Sharma issued cheques totaling Rs.14350 of which those of Rs.4250 have not been presented by 31 December.

Show the corrections to be made in cash book and ascertain the balance to be shown in the balance sheet and then prepare a BRS.

7.       Raghav and Co. have two bank accounts, account no.I and account number II. From the following particulars relating to account number I, fund out the balance on that account of 31 December,2015 according to the cash book of the firm.

i.                     Cheques paid into the bank prior to 31 December but not credited for Rs.10,000.

ii.                   Transfer of funds from account number II to account number I recorded by the bank, on 31 December but  not entered in the cash book after that date for Rs.8000.

iii.                  Cheques issued prior to 31 December but not presented until after that date for Rs.7429.

iv.                 Bank charges debited by the bank not entered in the cash book for Rs.200.

v.                   Intrest debited by the bank not entered in the cash book Rs.580.

vi.                 Overdraft as per pass book Rs.18,990.

8.       Prepare a BRS from the following particulars and show the balance as per cash book.

i.                     Balance as per pass book overdrawn Rs.20,000.

ii.                   Intrest on bank overdraft not entered in the cash book Rs.2,000.

iii.                  Rs.200 insurance premium paid by bank has not been entered in the cash book.

iv.                 Cheques drawn  in the last week of December but not cleared till date for Rs.3000 and for Rs.3500.

v.                     Cheques deposited into the bank on November but yet to be credited Rs.6000.

vi.                 Wrongly debited by bank Rs.500.

9.       From the following particulars, prepare the BRS of Varsha as on March 2015.

i.                     Balance as per pass book Rs.10,000.

ii.                   Bank collected a cheque of Rs.500 on behalf of Varsha but wrongly credited to Harsha’s account.

iii.                  Bank recorded a cash deposit of Rs.1589 as Rs.1598.

iv.                 Withdrawal column of the pass book undercast by Rs.100.

v.                   The credit balance of Rs.1500 on page 5 of the apss book was recorded on page 6 as the debit balance.

vi.                 The payment of a cheque of Rs.350 was recorded twice in the pass book.

vii.                The pass book showed a credit for a cheque of Rs.1000 deposited by Shri Kishan(another customer of the bank.)

10.   Kumar finds that the bank balance shown by his cash book on 31 december,2015 is Rs.90,600(credit) but the pass book shows a difference due to the following reason:

A cheque (post dated) for Rs.1000  has been debited in the bank column of the cash book but not presented for payment. Also a cheque for Rs.8000 drawn in favor of Manohar has not yet been presented for payment. Cheques totaling Rs.1500 dfeposited in the bank have not yet been collected and cheque for Rs. 5000 has been dishonoured.