Page 3 - Lesson Note
P. 3
Causes of difference between in the balance
as per cash book and pass book :
Basis of differences 1. Differences due to timing.
2. Differences due to the recording of transactions by the
bank.
3. Differences due to errors or omissions.
(A) Differences due Following transactions are recorded in Cash Book or in Pass
to timing. Book at a different date.
1. Cheques issued but not presented for
payment. Balance as per Cash Book reduces
immediately upon issue but balance as per Bank Pass
Book remains unaffected unless it is presented for
payment.
2. Cheques deposited but not yet collected. When we
deposit a cheque, balance as per Cash Book increases
immediately but balance as per Bank Pass Book
remains the same until it is cleared and actually
collected by the bank.
(B) Differences due These differences may arise, when a transaction is
to the recording of recorded by the bank in the passbook, but not
transactions by recorded in the cash book.
bank These types of transactions are unknown to the
account holder.
Some examples of this type are:
1. Interest allowed/credited by the bank.
2. Bank Charges and Interest charged/debited by bank.
3. Direct payment made by bank standing instruction of
Account Holder.
4. Direct deposit made by the customer
5. Interest/Dividend collected by Bank
6. Bills Receivables Collected by Bank on our behalf.
7. Dishonour of a Bill Discounted.
8. Bills Payable met by Bank on our behalf.
(C) Differences due These differences may arise, due to an error
to error & committed in recording transactions in the cash book
