Page 4 - Lesson Note

omissions in by the account holder or in the passbook by the bank.
recording (I) The error committed by the account holder in the
recording of transactions:

 Cheque issued but not recorded in the Cash Book.
 Cheques deposited into the bank but omitted to record
in the cash book.
 Error in totalling or balancing of the bank column of
the cash book.
(II) The error committed by the bank in the recording of
transactions:

 Wrong debit or credit in the account holder’s account.
 Recording bank charges and interest more than once.

Meaning of cash book Debit balance :

 Cash book with Debit balance means Cash book with favourable
balance or Positive balance.

 Debit or Positive balance as per cash book means the amount of
deposits is in excess of the Withdrawals

Preparation of Bank Reconciliation Statement starting
with cash book debit balance :

Particulars Plus items Minus Items

Debit balance (favourable balance)as per xxx
cash book

Add: i. Cheque issued but not yet xxx
presented for payment
ii. interest allowed by the bank or interest xxx

iii.dividend collected by bank xxx

iv.direct deposits by customers into banks xxx

V. cheques paid into bank but omitted to xxx
be recorded in the cash book
vi. Bills on exchanged realised xxx

Less: i. cheque deposited but yet not xxx