Q.The 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 Book, the following differences were found:

This is the same kind of problem as before, except the firm is overdrawn — so the Add/Less treatment of every item must be exactly reversed compared with a favourable-balance problem.

Because the Cash Book shows an OVERDRAFT (a Credit balance) rather than a favourable balance, the treatment of every item is the exact reverse of a normal Cash-Book-to-Pass-Book reconciliation (see the master rule table, Section 5).

Bank Reconciliation Statement as on 31st December 2024 (starting from the overdraft as per Cash Book)

(Since the opening figure itself is an overdraft, it is entered in the '−' column, and every item's Add/Less is read from the 'Cash Book overdraft → Pass Book' column of the master rule table — the reverse of the favourable-balance table.)

Reasoning for each item:

• (a) With an overdraft, cheques issued but not presented make the overdraft as per Cash Book worse (larger) than it should be from the bank's point of view, because the bank has not yet paid the cheque out — so relative to the Cash Book, the Pass Book overdraft is SMALLER; this item is treated as 'Less' (reduces the overdraft figure), reversed from the 'Add' it would be under a favourable balance. …

For an overdraft problem, first decide the treatment as though the balance were favourable (using the ordinary table), then flip every single Add to Less and every Less to Add — this reversal rule (Section …

The most common error is forgetting to reverse the treatment at all, and applying the favourable-balance Add/Less directly to an overdraft — this produces a wrong final figure that can still look …