Can the bank balance as per books and bank be different ?
Why ?
Yes , Balance as per books and balance as per Bank pass book is different on a perticular day due to following reasons , that's why we have to do Bank reconciliation .
1) Cheque received by your company but not deposited in to Bank , so you made entry in the companies books but no entry in Bank pass book. ( difference)
2) Cheque issued by you to party , however party has not deposited cheque in to bank ,
balance in your books will reduced , Bank balance remain same .( difference)
3) Bank charges deducted by bank , come to know only after updating pass book , that entries you have to do.
4) Similarly Interest received from bank , come to know only after updating pass book , that entries you have to do .( difference)
5) payment directly made by party in your Bank account .
6) Due to wrong entry made in your books , clerical error , ( difference in books and pass book)
7 ) Cheque dishonored by the bank due to errors .
8) Standing Instruction given by the company to bank for payment of Taxes , Rent , Insurance and other expenses so entry in the bank book , no entry in your Books ( difference)
9) Other reasons ..................
But now days not many people issuing cheques , they make instant payment like , NIFT/ RTGS , G.pay other online payments etc difference is less between Bank balance as per books and pass book comparing in early days /years. on a particular day , so we have to do bank reconciliation
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