Preparation of BRS - Bank Balance as per Cash Book (Favourable / Debit Balance)

1. Start with the cash book balance.

2. Add items due to which balance of  the cashbook is lower/balance of the passbook is higher

3. Subtract items due to which balance of  the cashbook is higher/balance of the passbook is lower

4. The resulting figure is the reconciled bank balance as per the passbook.

Situation:

Aarav runs a small bookstore. As of 30th September, his cash book shows a bank balance of ₹12,000. But when he receives his passbook (bank statement), it shows a different balance. Let’s see where the difference comes from:

Transactions that cause differences:

• Aarav deposited a cheque of ₹4,000, but the bank hasn’t credited it yet (it’s still “in clearing”).

• He issued a cheque of ₹2,500 to buy books, but the supplier hasn’t presented it to the bank.

• The bank charged ₹200 as service fees, but Aarav didn’t know it yet.

• His friend Meera directly transferred ₹3,000 to his bank account—he hasn’t recorded it in his cash book.