It is very easy to prepare the bank reconciliation statement. While preparing the bank reconciliation statement the accountant has to go step by step. We are describing the various steps to be taken while preparing of bank reconciliation statement:-

  1. First of all accountant must check that the opening balances of bank statement and bank book are matching with the balances as per last bank reconciliation statement.
  2. All entries must be checked very carefully and ticked in bank statement and the bank book.
  3. Pending entries in last bank reconciliation also must be checked and make sure that all the entries are ticked.
  4. Then make the list of non-ticked entries on a separate piece of paper.
  5. Now,  to reconcile the balances of bank statement and bank book, the accountant has to take a base of one balance either as per bank statement or as per bank book. Here, we are taking the balance as per bank book as base balance and we are assuming that the balance as per bank book is debit balance.
  6. Add the amount of cheques issued by us but not presented for payment.
  7. Add the amount directly credited by the bank in our account.
  8. Add the amount of cheque issued by us but dishonoured by bank.
  9. Subtract the amount of cheques deposited by us but not cleared.
  10. Subtract the amount of cheques deposited by us but dishonoured.
  11. Subtract the amount which are debited directly in our account.
  12. Add or subtract the amount mistake in balancing either in bank statement or in bank book.

After making the above adjustments the balance must be equal to the balance as per bank statement or pass book.

Please note that in above case, we have taken the debit balance as per bank book. The position will be reversed if there is credit balance according to bank book i.e. the items which we are adding will be subtracted and the items which we are subtracting will be added.

Following illustrations will clarify the above matter in better way:-

Illustration:

M/s XYZ Limited is maintaining its current account with State Bank of India. On 31.07.2012 the books of company shows credit balance Rs.1591928.32 while the statement of account of State Bank of India shows debit balance Rs.1629926.32. After reconciling the accounts following differences were traced:-

  1. Cheque No. 861587 received from M/s Star Enterprises for Rs.25834/= which was deposited by us on 30.07.12 but not cleared till 31.07.12.
  2. Cheque No. 023699 received from M/s Gift House for Rs.20520/= which was deposited by us on 30.07.12 but not cleared till 31.07.12.
  3. Cheque No. 386643 issued to MTNL for Rs.356/= on 22.07.12 but not presented for payment.
  4. Cheque No. 386644 issued to Morning Place for Rs.8000/= on 29.07.12 but not presented for payment.

Prepare Bank reconciliation statement as on 31.07.12

Solution:

M/S XYZ  LTD.

BANK RECONCILIATION STATEMENT

WITH STATE BANK OF INDIA AS ON 31.07.2012

 

Balance as per books of M/s XYZ LTD. (Over Draft) (Cr.)

1591928.32

ADD: Cheques Deposited But Not Cleared 

DATE CHEQUE NO. PARTICULARS AMOUNT
30.07.12

861587

STAR ENTERPRISES

25834/=

30.07.12

023699

GIFT HOUSE

20520/=

TOTAL

46354/=

 

 

46354.00

LESS: Cheques issued but not presented for payment

DATE CHEQUENO. PARTICULARS AMOUNT
22.07.12 386643 MTNL

356/=

29.07.12 386645 MORNING PLACE

8000/=

TOTAL

8356/=

 

8356.00

BALANCE AS PER BANK STATEMENT 1629926.32

Illustration:

M/s XYZ Limited is maintaining its current account with Syndicate Bank. On 31.07.2012 the books of company shows debit balance for Rs.57713.20 while the statement of account of Syndicate Bank shows a credit balance for Rs.38963.20. After reconciling the accounts, following differences were traced:-

  1. Cheque No. 203790 received from M/s Star Enterprises for Rs.20000/= which was deposited by us on 30.07.12 but not cleared till 31.07.12.
  2. Cheque No. 14856 received from M/s Gift House for Rs.2250/= which was deposited by us on 30.07.12 but not cleared till 31.07.12.
  3. Cheque No. 114964 issued to BRPL for Rs.1500/= on 23.07.12 but not presented for payment.
  4. Cheque No. 114963 issued to Mr. Y for Rs.2000/= on 21.07.12 but not presented for payment.
  5. Bank charges debited by bank on 12.07.12 for Rs.500/= which were not entered by the company.
  6. On 16.07.12, bank made direct payment for income tax for Rs.2000/= which was not entered by company.
  7. Cheque No. 300150 for Rs.2500/= deposited directly by M/S Mascot Traders on 26.07.12 but not entered in the books of company.

Prepare Bank reconciliation statement as on 31.07.12

Solution:

M/S XYZ LTD.

BANK RECONCILIATION STATEMENT

WITH SYNDICATE BANK  AS ON 31.07.2012

 

Balance as per books of M/S XYZ LTD. (Dr.)

57713.20

LESS: Cheques Deposited But Not Cleared 

DATE CHEQUE NO. PARTICULARS AMOUNT
30.07.12

203790

STAR ENTERPRISES

20000/=

30.07.12

148756

GIFT HOUSE

2250/=

TOTAL

22250/=

 

22250.00

LESS: Amount Debited By Bank But Not Entered By COMPANY 

DATE PARTICULARS AMOUNT
12.07.12 BANK CHARGES

500/=

16.07.12 DIRECT PAYMENT MADE FOR INCOME TAX

2000/=

TOTAL

2500/=

 

2500.00

ADD: Cheques issued by Company but not presented for payment

TE CHEQUENO. PARTICULARS AMOUNT
21.07.12 114963 MR. Y

2000/=

23.7.12 114964 BRPL

1500/=

TOTAL

3500/=

3500.00

ADD: Amount Credited By Bank But Not Debited By Company

ATE CHEQUENO. PARTICULARS AMOUNT
26.07.12 300150 MASCOT TRDERS

2500/=

TOTAL

2500/=

 

2500.00

BALANCE AS PER BANK STATEMENT

38963.20

 

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