Bank Reconciliation Statement

AFTERSCHO☻OL
– DEVELOPING CHANGE MAKERS
CENTRE FOR SOCIAL ENTREPRENEURSHIP
PGPSE PROGRAMME –
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entrepreneurship & spiritual entrepreneurship
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 Bank Reconciliation Statement

Dr. T.K. Jain.

AFTERSCHO☺OL
Centre for social entrepreneurship
Bikaner M: 9414430763
tkjainbkn@yahoo.co.in
www.afterschool.tk, www.afterschoool.tk

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MATERIAL 2
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 What is bank reconciliation statement?

• There are differences between bank

balance as per pass book and as per the
bank account maintained by the firm.
These differences are due to many
reasons. Bank reconsiliation statement is
an attempt to identify the reasons of these
differences and take remedial actions
whereever necessary.

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 Reasons for differences between bank pass
book and bank account maintained by the
firm…
1. Cheque issued but not deposited by the
customers
2. Cheque deposited in the bank, but not
yet cleared
3. Direct payment by bank as per standing
instructions
4. Penalties / charges / interest levied by
bank without intimation to the firm.
5. Wrong posting / wrong entry
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If you deposit a cheque of Rs. 10000 in the firm
XYZ’s account, but the bank gives no
intimation to the firm. What will be the impact?
• The balance as per pass book will be
more than the balance as per personal
account of bank maintained by the firm.

• Solution:
• Add Rs. 10000 in the bank account of the
firm and thus the two balance will be
equal.
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Cheques issued but not yet presented for
payment
• The balance as per bank account
maintained by the firm will be reduced by
the amount of cheue (but the cheque has
not yet been presented in the bank).
• Thus in order to rectify the situation, we
have to add back this amount in the bank
stateemnt or

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 Interest allowed by the bank – what will
be the impact…
• When bank allows interest – the pass
book balance increases, but the firm
comes to know about it much later so the
balance as per the accounts of the firm
remain unaltered. In order to reconcile,
you have to add this amount in the
balance from the firm’s bank account.

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 Direct payment by customers into bank

• In this case the bank balance as per bank

pass book will increase – as customers
have deposited some money directly. In
this case there will be difference in the two
balances and in order to reconcile, please
add this amount in the balance as per
bank account of the firm.

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 Interest on investment received by the
bank
• Bank has received this money on behalf of
the firm (without intimation to the firm).
There will be difference in the accounts.
Thus to reconcile, add this amount in the
balance as per bank account of the firm.

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Dividend on shares collected by the bank

• The balance in the bank pass book will

increase – so in order to reconcile, add
this amount in the bank account of the
firm. (so add this).

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 Rebate on bills retired under rebate through
the
bank but full amount entered in the cash book -

• The firm has received some rebate on the

bills – the firm had given instructions to the
bank to make the payment as per the bill
amount, but due to rebate, the bank had
to pay less. Thus in order to reconcile, add
this rebate amount in the balance of bank
account of the firm.

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 Any wrong entry on Cr. side of the pass
book
• The balance of bank pass book has
increased due to wrong entry. Rectify this
entry with the bank. Till it is rectified, add
this amount in the bank reconciliation
statement to the bank balance account of
the firm, so that the two balances are
tallied.

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 About AFTERSCHO☺OL

• PGPSE - World’s most comprehensive

programme on social entrepreneurship –
after class 12th
• Flexible – fast changing to meet the
requirements
• Admission open throughout the year
• Complete support from beginning to the
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 Branches of AFTERSCHO☺OL

• PGPSE programme is open all over the

world as free online programme.
• Those who complete PSPSE have the
freedom to start branches of
AFTERSCHO☺OL
• A few branches have already started -
one such branch is at KOTA (Rajasthan).

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 Workshop on social entrepreneurship

• We conduct workshop on social

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association or any such place - just send
us a call and we will come to conduct the
workshop on social entrepreeurship.
• These workshops are great moments of
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 FREE ONLINE PROGRAMME

• AFTERSCHO☺OL is absolutely free

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 Pursue professional courses along with
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• AFTERSCHO☺OL permits you to pursue

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