Bank reconciliation statement
what is bank reconciliation statement.
a statement which is made to correct and reconcile the balances of bank statement and cash book is bank reconciliation statement.
purpose of bank reconciliation statement
the main purpose of bank reconciliation statement is to check how many amount is left in our bank account to issue the check
Reasons of disagreement of bank statement and cash book.
There are six reasons.
1. Deposit in Transit:
The cheques which we have deposited in the bank but not yet have recorded by the bank is a cause of difference between the balance of cash book and bank statement.
The cheques we have issued but not yet have been presented to bank are also a cause of disagreement between the two balances.
3. Bank Adjustments:
If the bank have credited or debited the customer account erroneously then it is also a cause of disagreement of balances between cash book and bank statement.
4. Book Adjustments:
If the customer makes a mistake in cash book while writing the amount or omitting to record the amount then there is a need of bank reconciliation statement.
5. NSF Cheques:
If there is no amount in the bank account the cheque returns dishonor and these cheques are called NSF cheques. These cheques lead to difference between cash book and bank statement.
6. Amount Collected by Bank:
If the cash or cheque is directly collected by the bank and customer has no information about it then it is also a reason of disagreement of balances between cash book and bank statement.
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