Book-Keeping and Accountancy · Class 11 Commerce
Ch 6Bank Reconciliation Statement — Class 11 Book-Keeping and Accountancy, concept-first.
Every business that operates a bank account keeps its own record of that account — in the Bank Column of its Cash Book — while the bank, quite independently, keeps its own record of the same account, which it gives to the business as a Pass Book (or a bank statement).
Key concepts
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Meaning and Need for a Bank Reconciliation Statement
A Bank Reconciliation Statement (BRS) is a statement prepared on a given date to reconcile the bank balance shown by a firm's Cash Book (Bank Column) with the balance shown by the bank's Pass Book, by listing every item…
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Meaning and Need for a Bank Reconciliation Statement
Every business that operates a bank account keeps its own record of that account — in the Bank Column of its Cash Book — while the bank, quite independently, keeps its own record of the same account,…
Cash Book (Bank Column) and Pass Book
Two independent books record the same bank account — understanding both, and how each is maintained, is the starting point for reconciling them.
Causes of Difference Between Cash Book and Pass Book Balances
The two balances differ almost every month, for a small, well-defined set of recurring reasons. Every genuine cause of difference falls under one of the following heads.
Favourable Balance and Bank Overdraft
A bank balance can be of two opposite kinds, and knowing which kind you are starting from decides whether an item is ADDED or SUBTRACTED in the BRS.
Preparation of the Bank Reconciliation Statement
A Bank Reconciliation Statement can be prepared starting from EITHER balance, to arrive at the other. Whichever balance you start from, the format is the same: a statement (never an account, so it has…
Exercises
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- Q1What is a Bank Reconciliation Statement? Explain the need for preparing one.Free
- Q2Distinguish between the Cash Book (Bank Column) and the Pass Book.Free
- Q3State the causes of difference between the balance shown by the Cash Book and the balance shown by the Pass Book.Preview
- Q4Distinguish between a Favourable Balance and an Overdraft, and explain how their treatment differs while preparing a BRS.Preview
- Q5State, with reasons, whether each of the following items will be ADDED or SUBTRACTED while preparing a Bank Reconciliation Statement startin…Preview
More questions
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- Example 6On 31st March 2024, the Cash Book (Bank Column) of a trader showed a debit balance of ₹15,000. On comparing it with the Pass Book, the follo…Free
- Example 7The Pass Book of a trader showed a credit balance of ₹20,000 as on 30th June 2024. On comparison with the Cash Book, the following were foun…Free
- Example 8The Cash Book (Bank Column) of a trader showed an overdraft (Credit balance) of ₹8,000 as on 31st December 2024. On comparison with the Pass…Preview
- Example 9The Pass Book of a trader showed a debit balance (overdraft) of ₹10,000 as on 31st January 2025. On comparison with the Cash Book, the follo…Preview
- Example 10On 31st March 2025, the Cash Book (Bank Column) of a trader showed a debit balance of ₹25,600. On comparing this with the Pass Book, the fol…Preview