29 June 2014
When we compare the balance of the cash book with pass book and the entries shown in these two books are different, then, there is a need for reconciling the balances shown by these two books, after taking all the points of disagreement into consideration. The statement prepared for reconciling both the balances is known as “Bank Reconciliation statement’.
This is a very simple procedure. There are only 4 steps to be followed for preparing the bank reconciliation. Bank reconciliation is done where there is a difference in balance as per your books of accounts with the balance as per the bank statement. In short it is reconciliation between two balances.
You may start as follows :
1. Start ticking the debit entries in your books with the credit entries in bank book (as you are aware that the debit in your book is the credit in the bank statement).
2. After completing the ticking of all the debit entries in your book, start ticking the credit entries in your book with the debit entries in the pass Statement).
Now you are left with unticked entries, both debit and credit entries in your books and in bank statement. That shows these entries do not reflect in the one of these two account.
Now preparation of BRS STATEMENT.
BALANCE AS PER YOUR BOOK (closing balance)
Add : AMT CREDITED BY BANK NOT ACCOUNTED BY U. (total of unticked credit amount in bank statement)
ADD : CHEQUES ISSUED BY YOU NOT PRESENTED. (total of unticked credit entry in your books)
LESS : CHEQUES DEPOSITED NOT CLEARED IN BANK (total of unticked debits in your books)
LESS : AMT DEBITED BY BANK NOT ACCOUNTED BY YOU (total of unticked debit entries in bank statement)
The balancing figure will be the BALANCE AS PER BANK STATEMENT
30 June 2014
Reconciliation is made to find out points of diff in two statements. bank reconciliation statement is made to find out diff between balance of bank and customer book. reason of diff is always not making proper entries, so a recon statement will always show list of entries pending whether at customer end or at bank end, when all entries are made in both books, balance will tally.
30 June 2014
bank reco (BRS) for matching the bal between bank balance as per book and as per bank statement will reco. for entry which make diff in the bal of both the a/c.
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