Preparation of BRS - Cash Book and Pass Book Balances for Different Periods

• When extracts of either book are given for different periods, consider only common items appearing in both the cashbook and the passbook.

• Use these common items to identify the reasons why balances differ and adjust accordingly in the Bank Reconciliation Statement.

• Cheques deposited but not yet cleared reduce your bank balance as per cash book

• Cheques issued but not yet presented increase your bank balance as per the passbook

Imagine Priya runs a small stationery shop. At the end of January, her cash book shows a bank balance of ₹40,000. When she gets her passbook from the bank, the balance is different!

Here’s what happened:

1.Cheques Deposited but Not Yet Credited

• Priya deposited three cheques for ₹2,000, ₹5,000, and ₹8,000 on December 29.
• The bank needed a few days to clear these cheques, so they only appear in the passbook on January 2.
• For those days, Priya’s cash book already shows money received, but the bank doesn’t—causing a difference.

2.Cheques Issued but Not Presented

• Priya issued two cheques of ₹7,000 and ₹8,000 to pay her suppliers on December 28.
• However, her suppliers didn’t deposit them in their banks until January 3.
• Priya’s cash book shows this money paid, but the bank still considers it available until the cheques are deposited.

3. Bank Charges & Interest

• The bank deducts ₹50 as service charges and credits ₹325 as interest on December 31.
• Priya hasn’t updated these in her cash book yet.

Priya’s Problem:
Her cashbook and passbook balances don't match because some items are recorded at different times in each book.

Solution: Bank Reconciliation Statement

Priya prepares a Bank Reconciliation Statement as on 31st January: