Livestock Economics, Marketing and Business Management

BANK RECONCILIATION STATEMENT

• The Bank Reconciliation Statement is as the same suggests, a statement setting for the bank balance as per the Cash book and Pass book and reconciling the two by stating how such differences have arisen. Is important to note that the bank Reconciliation Statement is reconciliation as on a specified data.
• The customer may have money with the bank, then he is said to have a favourable balance or in other words, a balance to his credit. This implies that in Cash book there will be debit balance in the bank columns, while in the pass Book it will be a credit.
• On the other hand, where the customer has drawn more from the bank then it is said to what extent the corresponding entry has not been made.
• It is important to remember very clearly that the differences between Cash book and Pass book balances arise because of entries made partly or wholly in, and only in one of the two books.
• In order to do the entries satisfactorily one should be clear in one’s mind as to where (Cash book or Pass book), the first record of transaction is made and therefore where and to what extent the corresponding entry has not been made.
• It is important to remember very clearly that the differences between Cash book and Pass book balance arise because of entries made party or wholly in, and only in one of the two books.