In the balance sheet as on 31st march what is should be shown as balance in bank? the bank account balance or balance as per the bank statement?. IS nt the bank statement balance to be shown as it is what is actually there in the asset/liability as on date? i have been told that the book balance is to come. Let me tell u an example
Mr.A has 10 eggs. He gives them to his banker Mr.B. Mr.B gives him a cheque book saying if he wants to take out eggs he has to fill a cheque leaf and give to him. There are some transactions between Mr.A and Mr.C. Mr.A has to pay Mr.C 5 eggs. The month is march. THe date is 31st. Mr. A fills a cheque for 5 eggs and gives it to Mr.C and Mr. C deposits with his banker. On April 3 the eggs are in Mr. C's account.
On 31st Mr.A has 10 eggs in his account. Irrepective of whether any cheques are in clearing or not Mr.B still has the 10 eggs in Mr.A's account. The period for clearing is a duration during which Mr.B CHECKS THE CHEQUE whether its true or not as per KYC. It is an internal process in the bank.
So given the data should Mr A show in his balance sheet that he has 10 eggs or that he has 5 eggs
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