1. Tick off all the items in the pass book with the entries in the bank column of the cash book and make a list of the entries as are found not ticked either in the cash book or the pass book. The unticked items are responsible for the difference in the balances shown by the cash book and the pass book.
2. Take balance as per cash book or pass book as the starting point.
3. Adjust the starting point with the other balance by adding or subtracting the unticked items as located in step1.
4. If balance as per cash book has been taken as the starting point, then balance as per cash book is to be adjusted according to entries passed in the passbook or viceversa.
The following table will help to prepare the Bank Reconciliation Statement.
Starting Balance | |||
Items | Dr.Balance as per Cash book or Overdraft as per pass book | Cr. Balance as per Pass book or Overdraft as per cash book | |
1 | Those items which affect the debit side of cash book | ||
a. Cheques deposited but not collected by bank | - | + | |
b. Cheques though entered in the cash book but omitted to be sent to the bank. | - | + | |
2 | Those items which affect the credit side of cash book | ||
a. Cheques issued but not presented for payment | + | - | |
3 | Those items which affect the credit side of pass book | ||
a. Interest/Dividend credited by Bank | + | - | |
b. Amount deposited directly by a customer into bank account | + | - | |
c. Cheques sent to the bank but omitted to be entered into cash book | + | - | |
4 | Those items which affect the debit side of pass book | ||
a. Bank charges charged by the bank | - | + | |
b. Interest on Overdraft. | - | + | |
c. Payment made by the bank on standing instructions of the customer | - | + | |