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On the debit side of a Cash Book, money deposited in a bank is noted in the bank column, while withdrawals are recorded on the credit side

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On the debit side of a Cash Book, money deposited in a bank is noted in the bank column, while withdrawals are recorded on the credit side. In its books of accounts, the bank also keeps track of a customer's account.

 

It credits such an account with deposits and debits it with withdrawals. A copy of it is also given to the customer in the form of a Pass Book or a Statement of Account for their information. Here's where you may learn about Cash Book Amendments.

Both the Cash Book and the Pass Book keep track of all deposits and withdrawals made within a certain period. As a result, the two balances at the end of the term should match.

 

However, there are situations when the two balances are out of sync. It becomes vital to understand why the differences exist. As a result, on a specific day, a Bank Reconciliation Statement is created to reconcile the bank balances in both the Cash Book and the Pass Book by highlighting the reasons for discrepancies.

 

You must use the missing approach to discover errors in the cash book and bank statement, and then generate a Bank Reconciliation Statement for Chand Bibi Ltd as of December 31, 2016:

 

I According to the cash book, there is an overdraft in the bank account......................... 80,000

 

(ii) A check has been recorded for collection but has not yet been forwarded to the bank...... 10,000

 

(iii) The cash book's credit side is short............................. 1,000

 

(iv) Premium on proprietor's Life Insurance Policy (LIP) paid on a regular basis....................5,000

 

(v) Bank charges are twice noted in the cash book...

 

(vi) The bank returns a customer's check as dishonored............. 4,000

 

(vii) Bill Receivables collected directly on behalf of the company by the bank........................ 20,000

 

(viii) Check received and entered twice in the cash book........................................................... 6,000

 ix) 3,000.

(x) A check for Rs. 45,000 was deposited in the bank, however the bank did not collect the Rs. 8,000 check.

 

 

 

 

Prepar a Bank Reconciliation Statement for Four Star (Pvt.) Ltd based on the following information to determine the causes of the difference in two balances as of August 31st, 2016.

I According to the Bank Statement, there is a bank overdraft. ........................................................ 17,000 people

 

 

(ii) During August, a check was issued but not cashed............................. 2,200

 

(iii) Dividends on banker's shares............................................ 2,300

 

(iv) The bank charges interest, which is noted twice in the Cash Book........................ 500

 

(v) Check deposited but not noted in Cash Book according to Bank Statement.......... 3,400 people

 

 

 

(vi) In the Cash Book, the Credit side of the Bank column is cast short........................... 1,000

 

 

 

(vii) Club dues are paid by the bank according to a standing directive that is not noted in the Cash Book... 1200 people

 

(viii) Check not credited owing to outstation ..................................................... 3,900