Accountancy · Ch 8 — Bank Reconciliation Statement
Preparing a BRS Starting from the Pass Book Balance
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Preparing a BRS Starting from the Pass Book Balance
Starting instead from the balance as per Pass Book and working towards the balance as per Cash Book simply REVERSES every sign used in the previous section, since the two statements are simply two ways of explaining the very same gap:
| Item | Treatment (to arrive at Cash Book balance) |
|---|---|
| Cheques issued but not yet presented | SUBTRACT |
| Cheques deposited but not yet collected | ADD |
| Bank charges / interest on overdraft debited by bank, not yet in Cash Book | ADD |
| Interest / dividend collected by bank, not yet in Cash Book | SUBTRACT |
| Direct payment by bank under standing instructions, not yet in Cash Book | ADD |
| Direct deposit by a customer into the firm's bank account, not yet in Cash Book | SUBTRACT |
| Cheque deposited, later dishonoured, not yet in Cash Book | ADD |
Definition 1Reconciling Item
Any individual cause of difference between the Cash Book and Pass Book balances — a timing difference or an error — listed as a separate 'Add' or 'Less' line in the …