Topics
Introduction to Book-Keeping and Accountancy
- Accounting
- Book-Keeping
- Accountancy
- Book-Keeping vs. Accountancy
- Basis (Methods) of Accounting System
- Qualitative Characteristics of Accounting Information
- Basic Terms in Accounting
- Transaction
- Capital and Drawings
- Debtors, Creditors and Bad Debts
- Expenditure and Its Types
- Discount and Its Types
- Solvent Person vs. Insolvent Person
- Accounting Year
- Trading Concerns vs. Not for Profit Concerns
- Concept of Goodwill
- Fundamentals of Business Earnings
- Concepts of Assets, Liabilities and Net Worth
- Accounting Principles
- Accounting Concepts
- Core Accounting Concepts
- Accounting Standards
Meaning and Fundamentals of Double Entry Book-Keeping
Journal
- Accounting Documents
- Goods and Service Tax(GST)
- Types of Accounting Documents
- Voucher
- Tax Invoice (Under GST)
- Credit Memo
- Receipt
- Cheque
- Types of Cheques
- Books of Accounts
- Books of Accounts > Journal
- Journal Entries
- Journal Entries > Goods Account
- Journal Entries > Recording Discount in Journal
- Journal Entries > Other Important Journal Entries
Ledger
Subsidiary Books
- Concept of Subsidiary Books
- Cash Book
- Cash Book > Simple Cash Book (Single Column Cash Book)
- Cash Book > Two Column Cash Book (With Cash and Bank Columns)
- Cash Book > Petty Cash Book
- Simple Petty Cash Book
- Analytical Petty Cash Book
- Purchase Book
- Purchase Return Book
- Sales Book
- Sales Return Book
- Journal Proper
Bank Reconciliation Statement
- Accounting Documents Used in Banking
- Accounting Documents Used in Banking
- Pay-in-Slip
- Withdrawal Slip
- Bank Pass Book
- Bank Statement
- Bank Advice
- Concept of Virtual Banking
- Bank Reconciliation Statement(BRS)
- Cash Book vs Pass Book : Causes of Differences
- Time Difference(Regarding BRS)
- Errors and Omission Made by Bank or Businessman
- Formats of BRS
- Preparation of BRS
- Cash Book and Pass Book Comparison for Common Period
- Cash Book and Pass Book Balances for Different Periods
- Bank Balance as per Cash Book (Favourable / Debit Balance)
- Bank Balance as per Pass Book (Favourable / Credit Balance)
- Overdraft as per Cash Book (Unfavourable / Credit Balance)
- Overdraft as per Pass Book (Unfavourable/Debit balance)
- Reconciliation of Debtors and Creditors
Depreciation
Rectification of Errors
Final Accounts of a Proprietary Concern
Single Entry System
- Concept of Single Entry System
- Single Entry System vs. Double Entry System
- Parts of Single Entry System
- Statements of Affairs
- Statement of Profit or Loss
- Statement of Profit or Loss > Net Worth Method
- Practical Problems on Single Entry System
- Introduction
- Examples of Errors and Omissions
- Key Takeaways
Maharashtra State Board: Class 11
Introduction
When you compare the balance in your cash book (your records) and your bank passbook (bank’s records), sometimes they don’t match. This could be because either you or the bank made a mistake (an error) or forgot to record something (an omission).
Maharashtra State Board: Class 11
Examples of Errors and Omissions
| Error/Omission Type | Real-Life Example | Effect on Cash Book Balance | Effect on Passbook Balance |
|---|---|---|---|
| Wrong Amount Recorded by Business | Bank charges deducted ₹540, but businessman records ₹450 in cash book | Understated expense in cash book; balance appears higher | Correct amount recorded; balance lower |
| Entry on Wrong Side by Business | Deposit of ₹5,000 recorded as withdrawal in cash book | Balance reduced incorrectly in cash book | Correct effect given; balance higher |
| Double Entry | Cheque of ₹2,000 deposited recorded twice in cash book | Cash book balance overstated | Passbook balance correct |
| Omission by Business | Cheque amounting to ₹3,000 deposited in bank but not recorded in cash book | Cash book balance understated | Passbook balance correct |
| Omission by Bank | The bank forgets to credit the passbook for a cheque deposit of ₹3,000 | The cash book shows correct higher balance | Passbook balance understated |
| Wrong Amount Recorded by Bank | The bank credits ₹700 instead of ₹1,000 | The cash book shows correct balance | Passbook balance understated by ₹300 |
| Entry on Wrong Side by Bank | The bank wrongly shows a ₹1,000 deposit as a withdrawal | The cash book shows correct balance | Passbook balance understated |
Important Terms
Overstatement
- Overstatement is when an account shows a value more than the actual correct amount.
- Example: If a company's income statement shows interest expenses as ₹2,000, but the real expense was only ₹1,500, then interest expense is overstated by ₹500
Understatement
-
Understatement is when an account shows a value less than the actual correct amount.
-
Example: If accounts payable are actually ₹10,000 but only ₹8,000 is recorded, then accounts payable is understated by ₹2,000
Maharashtra State Board: Class 11
Key Takeaways
-
Errors and omissions: Cause differences between cashbook and passbook balances.
-
Types: Wrong amount, wrong side, double entry, omission.
-
Effect: Errors by businessman affect cash book; errors by bank affect passbook.
-
Overstatement: Value shown is too high.
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Understatement: Value shown is too low.
