Balance as per passbook of Mr. Kumar is 3,000. (a) Cheque paid into bank but not yet cleared - Ram Kumar ₹ 1,000, Kishore Kumar ₹ 500 (b) Bank Charges ₹ 300 (c) Cheque issued but not presented - Hameed ₹ 2,000, Kapoor ₹ 500 (d) Interest entered in the passbook but not entered in the cash book ₹ 100. Prepare a bank reconciliation statement.
Bank Reconciliation Statement of Mr. Kumar
| Particulars | Plus Items (₹) | Minus Items (₹) |
|---|---|---|
| Balance as per Passbook | 3,000 | - |
| (a) Add: Cheque paid into bank but not yet cleared<br>(Ram Kumar ₹ 1,000 + Kishore Kumar ₹ 500) | 1,500 | - |
| (b) Add: Bank Charges<br>(Not recorded in Cash Book) | 300 | - |
| (c) Less: Cheque issued but not presented<br>(Hameed ₹ 2,000 + Kapoor ₹ 500) | - | 2,500 |
| (d) Less: Interest entered in Passbook but not in Cash Book | - | 100 |
| Balance as per Cash Book | 4,800 | 2,600 |
Net Balance as per Cash Book (4,800 - 2,600) = ₹ 2,200
Explanation
To prepare the Bank Reconciliation Statement starting from the Passbook balance, we adjust for items recorded differently in the two books.
- Cheques deposited but not cleared (₹ 1,500) and Bank Charges (₹ 300) are entries that exist in the Passbook (or affect it) but are not yet in the Cash Book. Specifically, deposited cheques increase the Cash Book but not the Passbook yet, and Bank Charges decrease the Passbook but not the Cash Book yet. Both these items make the Passbook balance lower than the Cash Book, so they are added.
- Cheques issued but not presented (₹ 2,500) and Interest (₹ 100) increase the Passbook balance relative to the Cash Book. The Cash Book shows a lower balance (due to payments made or interest not recorded), so these are subtracted to arrive at the Cash Book balance.
Solution Steps
Step 1: Start with the Passbook balance: ₹ 3,000.
Step 2: Add amounts that make the Cash Book balance higher than the Passbook balance: Uncleared cheques (₹ 1,500) and Bank Charges (₹ 300). Total Additions = ₹ 1,800.
Step 3: Subtract amounts that make the Cash Book balance lower than the Passbook balance: Unpresented cheques (₹ 2,500) and Interest (₹ 100). Total Subtractions = ₹ 2,600.
Step 4: Compute the final Cash Book balance: 3,000 + 1,800 - 2,600 = ₹ 2,200.