Book-Keeping and Accountancy · Ch 6 — Bank Reconciliation Statement
Cash Book (Bank Column) and Pass Book
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.
Cash Book (Bank Column)
The book maintained by the business itself, in which every transaction that passes through its bank account — deposits, cheques issued, and any bank receipt or payment once known — is recorded from the business's own point of view.
In the Cash Book's Bank Column, a deposit into the bank is DEBITED (increasing the balance), and a cheque issued or any other payment out of the bank is CREDITED (decreasing the balance) — exactly like any other personal account maintained by the business.
Pass Book
A copy of the firm's account as it appears in the bank's own books, given (or made available, e.g. as a bank statement) by the bank to its customer; it records every transaction from the BANK's point of view.
Because the Pass Book records the business's account from the bank's point of view, its debit and credit are the mirror image of the Cash Book's: when the bank RECEIVES money for the firm's account, that money becomes a liability for the bank (it now owes the depositor that amount), so the bank CREDITS the account; when the bank PAYS money out of the firm's account, it reduces what it owes the firm, so the bank DEBITS the account.
| Basis | Cash Book (Bank Column) | Pass Book |
|---|---|---|
| Maintained by | The business itself | The bank |
| Point of view | The business's own point of view | The bank's point of view |
| A deposit into the bank | Debited (increases balance) | Credited (bank owes the depositor more) |
| A cheque issued/paid | Credited (decreases balance) | Debited (bank owes the depositor less) |
| A favourable (money-at-bank) position | Shown as a Debit balance | Shown as a Credit balance |
| An overdraft position | Shown as a Credit balance | Shown as a Debit balance |
The book maintained by the business itself, recording every bank transaction from the business's own point of view (deposit = debit …
A copy of the firm's account as it appears in the bank's own books, recording every transaction from the bank's point of view (deposit = cred …