Cash book & bank statement

Explanation of Cash Book and Bank Statement Most businessmen use a two or three column cash book (with a bank column) for recording transaction made through the bank account. Each time cash, cheques, money orders or postal orders, etc. are deposited in the bank, the cash book (bank column) is debited, i.e. an entry is … Read more

The bank reconciliation process

Explanation Errors can occur in both the bank’s and the depositor’s recordkeeping systems. The bank reconciliation process should discover these mistakes. Service charges may be levied by the bank for regular or special services. They often appear as a reconciling item because banks notify customers of the amount only through the statement. The four basic … Read more

Bank reconciliation statement

What is the bank reconciliation statement? A statement prepared by the depositor (Account Holder) to overcome the differences in balances of Cash Book and Bank Statement is called Bank Reconciliation statement. or The process of accounting for the differences between the balance appearing on the bank statement and the balance of cash according to the … Read more

Treatment of Unpresented Cheques in Bank Reconciliation Statement

What Are Unpresented Cheques/Checks or Outstanding Cheques/Checks? All those cheques/checks which have been issued or drawn by the depositor but not presented to the bank for payment, till the date, on which Bank statement is issued, are called unpresented cheques. Effect of Unpresented Cheques/Checks on Bank Balance When a cheque/check is issued to a creditor or … Read more

Treatment of Uncleared Cheques in Bank Reconciliation Statement

What Are Uncleared or Uncollected or Uncredited Cheques/Checks All those cheques which have been deposited by the customer, but the amount of which has not been collected or credited by the bank in customer’s, account, till the date on which Bank Statement is issued are called uncleared cheques/checks. Effect of Uncleared Cheques on Bank Balance … Read more

Treatment of Errors and Omissions While Preparing Bank Reconciliation Statement

Errors and Omissions Some differences in Cash Book and Bank Statement may be the result of errors committed by the bank or by the person responsible for writing up Cash Book. These errors have to be properly rectified. Followings are the few examples of such errors and omissions. 1. Errors resulting more bank balance in … Read more

Unrecorded Transactions Treatment in Bank Reconciliation Statement

Unrecorded Transactions It has been mentioned that depositor (Customer) and Bank do not intimate each other every time when a transaction takes place. This leads to a difference between the balances of both the books. For some, transactions bank has earlier knowledge, it records these transactions in Bank Statement but does not intimate the depositor. The … Read more