Preparation of Bank Reconciliation Statement

Briefly explain the term favourable balance as per cash book

Enumerate the steps to ascertain the correct cash book balance

What is a bank reconciliation statement? Why is it prepared?

Explain the process of preparing bank reconciliation statement with amended cash balance

The cash book shows a bank balance of ₹ 7,800. On comparing the cash book with passbook the following discrepancies were noted:
(a) Cheque deposited in bank but not credited ₹ 3,000
(b) Cheque issued but not yet present for payment ₹ 1,500
(c) Insurance premium paid by the bank ₹ 2,000
(d) Bank interest credit by the bank ₹ 400
(e) Bank charges ₹ 100
(d) Directly deposited by a customer ₹ 4,000

Prepare bank reconciliation statement as on December 31, 2017. This day the passbook of Mr. Himanshu showed a balance of ₹ 7,000.
(a) Cheques of ₹ 1,000 directly deposited by a customer.
(b) The bank has credited Mr. Himanshu for ₹ 700 as interest.
(c) Cheques for ₹ 3,000 were issued during the month of
December but of these cheques for ₹ 1,000 were not presented during the month of December.

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.

On 1^st January 2017, ₹ 8,000 as showed by his cash book. ₹ 2,000 had been paid in by him but were not collected by the bank by January 01, 2017. He issued cheques of ₹ 800 which were not presented to the bank for payment up to that day. There was a debit in his passbook of ₹ 60 for interest and ₹ 100 for bank charges.
Prepare bank reconciliation statement for comparing both the balance