CLASS 11 COMMERCE ACCOUNTANCY (PART – I) CHAPTER – 5 Bank Reconciliation Statement

Bank Reconciliation Statement

Short Questions and Answers

1. State the need for the preparation of a bank reconciliation statement?

Answers

Preparing a bank reconciliation statement is necessary for:

  1. Helps in Identifying difference between cash book and pass book.
  2. It helps in knowing the actual bank balance.
  3. Helps in detection and prevention of frauds and errors in recording banking transactions
  4. It helps in knowing the actual bank balance.
  5. Helps creating revised Cash Book that reflects true bank balance.
  6. It helps in preventing embezzlement of money from the bank account.

2. What is a bank overdraft?

Answers

Bank overdraft is created when there is a withdrawal, which is over the bank balance available in account. It is an obligation to the account holder.

3. Briefly explain the statement ‘wrongly debited by the bank’ with the help of an example.

Answers

It means that the bank has debited the amount from the users account for some invalid reason. The following instance can help in understanding.

Rajesh’s account is charged overdraft of Rs.5000 even though his account has sufficient credit balance. It can happen when the cashier has done incorrect entry in account.

4. State the causes of difference occurred due to time lag.

Answers

The following are the causes of difference occurred due to time lag

  1. Cheque issued by the firm is not yet presented for payment.
  2. Cheque deposited into the bank but yet to be realized.
  3. Direct debits done by the bank on behalf of the customer.
  4. Amount deposited directly into the bank account.
  5. Interest and dividends that are not collected by the bank.
  6. Direct payments made by the bank on behalf of the customers
  7. Cheques that are deposited or bills discounted which is dishonoured

5. Briefly explain the term favourable balance as per cash book

Answers

When the total of the debit column of the Cash Book is more than the total credit column of Cash Book, it is known as debit balance or favourable balance. Favourable balance is an asset to an account holder. Favourable balance can also be defined as surplus of deposits over withdrawals.

6. Enumerate the steps to ascertain the correct cash book balance.

Answers

Difference between cash book and pass book can arise due to some transactions that are recorded in pass book not being present in the cash book. This can be rectified by recording those transactions in the cash book. The balance thus obtained is called as adjusted balance or amended balance. The following steps describe this process.

1. Note bank balance as per cash book.

2: Make corrections for errors committed in the cash book.

3: Transactions present only on passbook’s credit side must be updated in debit side of cashbook

4. Transactions present only on the passbook’s debit side must be updated in debit side of cashbook

5: Calculate new cash book balance and use it to prepare a Bank Reconciliation Statement.

Long Questions and Answers

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

Answers

A statement that is prepared to rectify or tally the difference that exists between user passbook and cashbook of firm, so that the cause of difference can be determined and rectified is known as Bank Reconciliation Statement. Following are the reasons for its preparation:

  1. To determine if the balance reported by the company’s cashbook is the correct amount.
  2. Rectifying any errors present in cash book so that proper statements can be generated.
  3. Prevents fraudulent activities like embezzlement and improves accountability.
  4. To discover any errors made by bank and applying corrective measures.
  5. Helps check the accuracy of information recorded in both the books.

2. Explain the reasons where the balance shown by the bank passbook does not agree with the balance as shown by the bank column of the cash book.

Answers

Here are some of the reasons which results in mismatch between bank passbook balance and bank column of cash book.

I. Timing Differences:

1. Cheques issued by the firm but not yet presented for payment: Cheques issued by the firm to the suppliers or creditors are immediately recorded on the credit side of the cashbook. However, there will be a time gap when the receiving party presents it to the bank. So the bank cannot debit the amount. It will result in changes in the balance amount between two books.

2. Cheques are deposited into the bank but not yet collected: A firm receives cheques from its debtors/customers, which are then immediately recorded in the debit side of the cashbook. However, when those cheques are deposited into the bank, the bank credits the firm’s account only after the cheques are actually realised. It creates a difference between the two balances.

3. Direct debits made by the bank on behalf of the customer: Bank deducts various charges like cheque collection charges, interest on overdraft, check bounce charges, the firm will not be aware of such debits and hence these changes will not be reflected in the firm’s cash book. Due to this reason the cashbook will not be in sync with the passbook.

4. Amounts directly deposited in the bank account: When debtors or customers directly deposit money into the firm’s bank account, the firm will not be aware of such deposits. Due to this, these entries will not be recorded into the cashbook. This will also create an imbalance between the bank passbook and firm’s cashbook.

5. Interest and dividends collected by the bank: The banks collects interest and dividend on behalf of the customer. It will not be known to the customer and hence will not be recorded into the firm’s cash book. This creates an imbalance between the bank passbook and firm’s cashbook.

6. Direct payments made by bank on behalf of customers: When the customers give standing instructions to the bank for making payments to the third parities like telephone bill, insurance premium, rent taxes etc., the firm will not be aware of these payments and hence such transactions will not be recorded into the firm’s cashbook. It is also a reason for imbalance.

7. Cheques deposited and bills dishonoured: A cheque deposited by the firm if dishonoured or a bill of exchange drawn by the business firm which is discounted with the bank is dishonoured on the date of maturity, the same is debited to customer’s account by the bank. This information is not available to the firm immediately, and it will not be recorded in the firm’s cashbook. This will also create an imbalance between the bank passbook and the firm’s cashbook.

II. Differences due to recording Errors:

The difference between the two balances could be due to an error of human nature. The following types of error can occur

1. Errors committed in recording transaction by the firm: When wrong recording of transactions relating to incorrect totalling, cheques issued, and cheques deposited etc. are committed by the firm in the cashbook. It will create an imbalance between the bank passbook and the firm’s cashbook.

2. Errors committed in recording transactions by the bank: When wrong recording of transactions related to cheques issued, wrong totalling, and cheques deposited etc. are committed by the bank in the passbook. It will create an imbalance between the bank passbook and the firm’s cashbook.

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

Answers

Difference between cash book and pass book can arise due to some transactions that are recorded in pass book not being present in the cash book. This can be rectified by recording those transactions in the cash book. The balance thus obtained is called as adjusted balance or amended balance. The following steps describe this process.

1. Note bank balance as per cash book.

2: Make corrections for errors committed in the cash book.

3: Transactions present only on passbook’s credit side must be updated in debit side of cashbook

4. Transactions present only on the passbook’s debit side must be updated in debit side of cashbook

5: Calculate new cash book balance and use it to prepare a Bank Reconciliation Statement.

Numerical Questions

1. From the following particulars, prepare a, bank reconciliation statement as at March 31, 2017.

(i) Balance as per cash book ₹ 3,200

(ii) Cheque issued but not presented for payment ₹ 1,800

(iii) Cheque deposited but not collected up to March 31, 2017 ₹ 2,000

(iv) Bank charges debited by bank ₹ 150

Answers

The reconciliation statement is shown below:

Bank Reconciliation Statement,  as on March 31, 2017
S. No.Particulars(+)Amount(–)Amount
Balance as per the Cash Book3,200
(i)Cheque issued but not presented for payment1,800
(ii)Cheque deposited but not cleared2,000
(iii)Bank charges150
Balance as per the Pass Book 2,850
5,0005,000

We see that the balance as per passbook on 31st March is ₹2, 850.

2. On March 31 2017 the cash book showed a balance of ₹ 3,700 as cash at bank, but the bank passbook made up to same date showed that cheques for ₹ 700, ₹ 300 and ₹ 180 respectively had not presented for payment, Also, cheque amounting to ₹ 1,200 deposited into the account had not been credited. Prepare a bank reconciliation statement.

Answers

The reconciliation statement is shown below:

Bank Reconciliation Statement, as on March 31, 2017
S. No.Particulars(+)Amount(-)Amount
Balance as per the Cash Book3,700
(i)Three cheques issued but not presented for payment1,180
(ii)Cheque deposited but not cleared1,200
Balance as per the Pass Book3,680
4,8804,880

The balance as per pass book as on 31st March is ₹3, 680.

3. 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

Answers

The bank reconciliation statement is shown below:

Bank Reconciliation Statement
S. No.Particulars(+)Amount(–)Amount
Balance as per the Cash Book7,800
(a)Cheque deposited but not credited in the Pass Book3,000
(b)Cheque issued but not yet presented for payment1,500
(c)Insurance premium paid by bank2,000
(d)Bank allowed interest400
(e)Bank debited charges100
(f)Amount directly deposited by customer4,000
Balance as per the Pass Book8,600
13,70013,700

The balance as per passbook is ₹8, 600

4. Bank balance of ₹ 40,000 showed by the cash book of Atul on December 31, 2016. It was found that three cheques of ₹ 2,000, ₹ 5,000 and ₹ 8,000 deposited during the month of December were not credited in the passbook till January 02, 2017. Two cheques of ₹ 7,000 and ₹ 8,000 issued on December 28, were not presented for payment till January 03, 2017. In addition to it bank had credited Atul for ₹ 325 as interest and had debited him with ₹ 50 as bank charges for which there were no corresponding entries in the cash book.

Prepare a bank reconciliation statement as on December 31, 2016.

Answers

The bank reconciliation statement is shown below:

Bank Reconciliation Statement of Atul as on  December 31, 2016
S. No.Particulars(+)Amount(–)Amount
Balance as per the Cash Book40,000
(i)Cheques deposited but not cleared in December15,000
(ii)Cheque issued but presented for payment for payment15,000
(iii)Bank allowed interest325
(iv)Bank debited charges50
Balance as per the Pass Book40,275
55,32555,325

The balance as per pass book is ₹ 40,275

5. On comparing the cash book with passbook of Naman it is found that on March 31, 2017, bank balance of ₹ 40,960 showed by the cash book differs from the bank balance with regard to the following:

(a) Bank charges ₹ 100 on March 31, 2017, are not entered in the cash book.

(b) On March 21, 2017, a debtor paid ₹ 2,000 into the company’s bank in settlement of his account, but no entry was made in the cash book of the company in respect of this.

(c) Cheques totaling ₹ 12,980 were issued by the company and duly recorded in the cash book before March 31, 2017, but had not been presented at the bank for payment until after that date.

(d) A bill for ₹ 6,900 discounted with the bank is entered in the cash book with recording the discount charge of ₹ 800.

(e) ₹ 3,520 is entered in the cash book as paid into bank on March 31st, 2017, but not credited by the bank until the following day.

(f) No entry has been made in the cash book to record the dishonour or on March 15, 2017 of a cheque for ₹ 650 received from Bhanu.

Prepare a reconciliation statement as on March 31, 2017.

Answers

The reconciliation statement is shown below:

Bank Reconciliation Statement of Naman as on March 31, 2017
S. No.Particulars(+)Amount(-)Amount
Balance as per the Cash Book40,960
(a)Bank debited charges100
(b)Amount directly paid by debtor into bank account2,000
(c)Cheques issued but not presented for payment12,980
(d)Discount charges of bill was omitted to be recorded in the Cash Book800
(e)Amount debited in bank column of the Cash Book but not deposited in bank3,520
(f)Cheque dishonoured not recorded in the Cash Book650
Balance as per the Pass Book50,870
55,94055,940

The balance as per pass book is ₹50, 870.

6. Prepare bank reconciliation statement as on December 31, 2017. On 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.

Answers

The reconciliation statement is shown below:

Bank Reconciliation Statement of Mr. Himanshu as on December 31, 2017
S. No.Particulars(+)Amount(-)Amount
Balance as per the Pass Book7,000
(a)Cheques directly deposited by a customer1,000
(b)Bank allowed interest700
(c)Cheques issued but not presented for payment in December1,000
Balance as per the Cash Book4,300
7,0007,000

Hence, the cash as per cash book is ₹4, 300.

7. From the following particulars prepare a bank reconciliation statement showing the balance as per cash book on December 31, 2016.

(a) Two cheques of ₹ 2,000 and ₹ 5,000 were paid into bank in October, 2016 but were not credited by the bank in the month of December.

(b) A cheque of ₹ 800 which was received from a customer was entered in the bank column of the cash book in December 2016 but was omitted to be banked in December, 2016.

(c) Cheques for ₹ 10,000 were issued into bank in November 2016 but not credited by the bank on December 31, 2016.

(d) Interest on investment ₹ 1,000 collected by bank appeared in the passbook.

Balance as per Passbook was ₹ 50,000

Answers

The reconciliation statement is shown below:

Bank Reconciliation Statement as on  December 31, 2016
S. No.Particulars(+)Amount(–)Amount
Balance as per the Pass Book50,000
(a)Cheques deposited but not cleared till 31 December7,000
(b)Cheque debited in the Cash Book but not deposited in the bank800
(c)Cheque issued but not presented (not debited in the Pass Book)10,000
(d)Interest on investment collected by bank1,000
Balance as per the Cash Book46,800
57,80057,800

The balance as per cash book is ₹ 46,800.

Note: In statement (c) the correct statement will be “debited”, it is mentioned as credited.

8. 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.

Answers

The bank reconciliation statement is shown below:

Bank Reconciliation Statement of Mr. Kumar
S. No.Particulars(+)Amount(–)Amount
Balance as per the Pass Book3,000
(a)Cheques deposited but not yet cleared.1,500
(b)Bank debited charges300
(c)Cheques issued but not presented for payment2,500
(d)Bank allowed interest but not entered in the Cash Book100
Balance as per the Cash Book2,200
4,8004,800

The balance as per the cash book is ₹ 2,200.

9. The passbook of Mr. Mohit current account showed a credit Balance of ₹ 20,000 on dated December 31, 2016. Prepare a Bank Reconciliation Statement with the following information.

(i) A cheque of ₹ 400 drawn on his saving account has been shown on current account.

(ii) He issued two cheques of ₹ 300 and ₹ 500 on of December 25, but only the 1st cheque was presented for payment.

(iii) One cheque issued by Mr. Mohit of ₹ 500 on December 25, but it was not presented for payment whereas it was recorded twice in the cash book.

Answers

The bank reconciliation statement is shown below:

Bank Reconciliation Statement of Mr. Mohit’s Current Account, as on December 31, 2016
S. No.Particulars(+)Amount(–) Amount
Balance as per pass book20,000
(i)Cheque issued from saving account wrongly debited in the current account of the pass book400
(ii)Cheque issued but not presented for payment500
(iii)Cheque issued but not presented for payment and twice credited in cash book1,000
Balance as per cash book18,900
20,40020,400

The balance as per cash book is ₹ 18,900.

10. On 1st January 2017, Rakesh had an overdraft of ₹ 8,000 as showed by his cash book. Cheques amounting to ₹ 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.

Answers

The bank reconciliation statement is shown below:

Bank Reconciliation Statement of Rakesh as on January 01, 2017
S. No.Particulars(+)Amount(-)Amount
Overdraft as per the Cash Book8,000
(i)Cheques deposited but not yet cleared2,000
(ii)Cheques issued but not presented for payment800
(iii)Interest on overdraft debited by bank60
(iv)Bank debited charges100
Overdraft as per the Pass Book9,360
10,16010,160

Hence, the overdraft as per the pass book is ₹9, 360.

11. Prepare bank reconciliation statement.

(i) Overdraft shown as per cash book on December 31, 2017 ₹ 10,000.

(ii) Bank charges for the above period also debited in the passbook ₹ 100.

(iii) Interest on overdraft for six months ending December 31, 2017 ₹ 380 debited in the passbook.

(iv) Cheques issued but not encashed prior to December 31, 2017 amounted to ₹ 2,150.

(v) Interest on Investment collected by the bank and credited in the passbook ₹ 600.

(vi) Cheques paid into bank but not cleared before December, 31 2017 were ₹ 1,100.

Answers

The bank reconciliation statement is shown below:

Bank Reconciliation Statement as on December 31, 2017
S. No.Particulars(+)Amount(-)Amount
Overdraft as per the Cash Book10,000
(i)Bank debited charges100
(ii)Interest charged by bank on overdraft380
(iii)Cheques issued but not presented for payment2,150
(iv)Interest on investment credited in the Pass Book but notentered in the Cash Book600
(v)Cheques deposited but cleared1,100
Overdraft as per the Pass Book8,830
11,58011,580

The overdraft as per passbook is ₹ 8,830.

12. Kumar found that the bank balance shown by his cash book on December 31, 2017 is ₹ 90,600 (Credit) but the passbook shows a difference due to the following reason:

A cheque (post-dated) for ₹ 1,000 has been debited in the bank column of the cash book but not presented for payment. Also, a cheque for ₹ 8,000 drawn in favour of Manohar has not yet been presented for payment. Cheques totalling ₹ 1,500 deposited in the bank have not yet been collected and cheque for ₹ 5,000 has been dishonoured.

Answers

Bank reconciliation statement for this question is shown below:

Bank Reconciliation Statement of Kumar as on  December 31, 2017
S. No.Particulars(+)Amount(–)Amount
Overdraft as per the Cash Book90,600
(i)Cheque debited in the Cash Book but not deposited in the bank1,000
(ii)Cheque issued but not presented for payment8,000
(iii)Cheque deposited but not yet cleared1,500
(iv)Cheque dishonoured5,000
Overdraft as per the Pass Book90,100
98,10098,100

Hence, the overdraft as per the pass book is ₹98, 100.

13. On December 31, 2017, the cash book of Mittal Bros. Showed an overdraft of ₹ 6,920. From the following particulars prepare a Bank Reconciliation Statement and ascertain the balance as per passbook.

(1) Debited by bank for ₹ 200 on account of Interest on overdraft and ₹ 50 on account of charges for collecting bills.

(2) Cheques drawn but not encashed before December, 31 2017 for ₹ 4,000.

(3) The bank has collected interest and has credited ₹ 600 in passbook.

(4) A bill receivable for ₹ 700 previously discounted with the bank had been dishonoured and debited in the passbook.

(5) Cheques paid into bank but not collected and credited before December 31, 2017 amounted ₹ 6,000.

Answers

Bank reconciliation statement for this question is shown below:

Bank Reconciliation Statement of Mittal Bros. as on December 31, 2017
S. No.Particulars(+)Amount(-)Amount
1Overdraft as per the Cash Book6,920
2Bank debited interest on overdraft200
3Bank debited charges for collecting bills50
4Cheque issued but not presented for payment4,000
5Bank collected interest600
6Bill Receivable dishonoured700
7Cheque deposited but not cleared in December6,000
Overdraft as per the Pass Book9,270
13,87013,870

The overdraft amount as per the pass book is ₹ 9,270.

14. Prepare bank reconciliation statement of Shri Bhandari as on December 31, 2017

(i) The Payment of a cheque for ₹ 550 was recorded twice in the passbook.

(ii) Withdrawal column of the passbook under cast by ₹ 200

(iii) Cheque of ₹ 200 has been debited in the bank column of the Cash Book but it was not sent to bank at all.

(iv) A Cheque of ₹ 300 debited to Bank column of the cash book was not sent to the bank.

(v) ₹ 500 in respect of dishonoured cheque were entered in the passbook but not in the cash book. Overdraft as per passbook is ₹ 20,000.

Answers

The bank reconciliation statement for this question is given below:

Bank Reconciliation Statement of Shri Bhandari as on December31, 2017
S. No.Particulars(+)Amount(–)Amount
Overdraft as per the Pass Book20,000
(i)Payment of cheque twice debited in the Pass Book550
(ii)Withdrawal column of the Pass Book under cast200
(iii)Cheque debited in the Cash Book but not deposited in the bank200
(iv)Cheque added in the Cash Book but not deposited in the bank300
(v)Cheque dishonoured500
Overdraft as per the Cash Book18,650
20,20020,200

Hence, the overdraft as per the cash book is ₹ 18,650.

15. Overdraft shown by the passbook of Mr. Murli is ₹ 20,000. Prepare bank reconciliation statement on dated December 31, 2017.

(i) Bank charges debited as per passbook ₹ 500.

(ii) Cheques recorded in the cash book but not sent to the bank for collection ₹ 2,500.

(iii) Received a payment directly from customer ₹ 4,600.

(iv) Cheque issued but not presented for payment ₹ 6,980.

(v) Interest credited by the bank ₹ 100.

(vi) LIC paid by bank ₹ 2,500.

(vii) Cheques deposited with the bank but not collected ₹ 3,500.

Answers

The bank reconciliation statement for this question is given below:

Bank Reconciliation Statement of Mr. Murli as on December 31, 2017
S. No.Particulars(+)Amount(-)Amount
Overdraft as per the Pass Book20,000
(i)Bank charges debited in the Pass Book500
(ii)Cheque recorded in the Cash Book but not banked2,500
(iii)Amount directly paid by customer in the bank4,600
(iv)Cheque issued but not presented for payment6,980
(v)Interest allowed by bank100
(vi)LIC (insurance premium) paid by bank2,500
(vii)Cheques deposited but not cleared3,500
Overdraft as per the Cash Book22,680
31,68031,680

Hence, the overdraft as per the cash book is ₹22,680

16. Raghav & Co. have two bank accounts. Account No. I and Account No. II. From the following particulars relating to Account No. I, find out the balance on that account of March 31, 2017 according to the cash book of the firm.

(i) Cheques paid into bank prior to March 31, 2017, but not credited for ₹ 10,000.

(ii) Transfer of funds from account No. II to account no. I recorded by the bank on March 31, 2017 but entered in the cash book after that date for ₹ 8,000.

(iii) Cheques issued prior to March 31, 2017 but not presented until after that date for ₹ 7,429.

(iv) Bank charges debited by bank not entered in the cash book for ₹ 200.

(v) Interest Debited by the bank not entered in the cash book ₹ 580.

(vi) Overdraft as per Passbook ₹ 18,990.

Answers

The bank reconciliation statement for this question is given below:

Bank Reconciliation Statement of Mr. Raghav and Co. Account No. I as on March 31, 2017
S. No.Particulars(+)Amount(-)Amount
Overdraft as per the Pass Book18,990
(i)Cheque deposited but not cleared prior to 31 Mar. 201710,000
(ii)Amount transferred Account II to Account I recorded in the Pass Bookbut not entered in the Cash Book8,000
(iii)Cheque issued but not presented for payment7,429
(iv)Bank debited charges200
(v)Interest on overdraft not credited in the Cash Book580
Overdraft as per the Cash Book23,639
34,41934,419

Hence, the overdraft as per cash book is ₹ 23,639

17. Prepare a bank reconciliation statement from the following particulars and show the balance as per cash book.

(i) Balance as per passbook on December 31, 2017 overdrawn ₹ 20,000.

(ii) Interest on bank overdraft not entered in the cash book ₹ 2,000.

(iii) ₹ 200 insurance premium paid by bank has not been entered in the cash book.

(iv) Cheques drawn in the last week of December, 2017, but not cleared till date for ₹ 3,000 and ₹ 3,500.

(v) Cheques deposited into bank on November, 2017, but yet to be credited on dated December 31, 2013 ₹ 6,000.

(vii) Wrongly debited by bank ₹ 500.

Answers

The bank reconciliation statement for this question is given below:

Bank Reconciliation Statement as on December 31, 2017
S. No.Particulars(+)Amount(-)Amount
Overdraft as per the Pass Book20,000
(i)Interest on overdraft not credited in the Cash Book2,000
(ii)Insurance premium paid by bank not entered in the Cash Book200
(iii)Cheques issued but not presented for payment6,500
(iv)Cheques deposited but not cleared6,000
(v)Amount wrongly debited by bank500
Overdraft as per the Cash Book17,800
26,50026,500

Hence, the overdraft as per cash book is ₹17, 800

18. The passbook of Mr. Randhir showed an overdraft of ₹ 40,950 on March 31, 2017.

Prepare bank reconciliation statement on March 31, 2017.

(i) Out of cheques amounting to ₹ 8,000 drawn by Mr. Randhir on March 27, a cheque for ₹ 3,000 was encashed on April 11.

(ii) Credited by bank with ₹ 3,800 for interest collected by them, but the amount is not entered in the cash book.

(iii) ₹ 10,900 paid in by Mr. Randhir in cash and by cheques on March, 31 cheques amounting to ₹ 3,800 were collected on April, 07.

(iv) A Cheque of ₹ 780 credited in the passbook on March 28 being dishonoured is debited again in the passbook on April 01, 2017. There was no entry in the cash book about the dishonour of the cheque until April 15

Answers

The bank reconciliation statement for this question is given below:

Bank Reconciliation Statement of  Mr Randhir as on March 31, 2017
S. No.Particulars(+)Amount(–)Amount
Overdraft as per the Pass Book40,950
(i)Cheque issued but not presented for payment in March3,000
(ii)Interest collected by bank not entered in the Cash Book3,800
(iii)Cheque deposited but not yet cleared in March3,800
(iv)Cheque dishonoured in April780
Overdraft as per the Cash Book43,170
47,75047,750

Hence, the overdraft as per cash book is ₹43,170