Submitted to: Mr.

Pankaj Maini

Submitted by: Abhishek Manchanda Amit Sharma Satinder Kumar Suyash Jain

A bank is a financial institution which deals with deposits and advances and other related services. It receives money from those who want to save in the form of deposits and it lends money to those who need it.

In general terms, the business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to earn a profit.

When you open up and maintain a bank account, it sometimes is difficult to keep up with all the banking terms that your financial institution throws at you. "Reconciliation" is a good one to know; it involves keeping track of your money

Bank reconciliation is the process of matching and comparing figures from accounting records against those presented on a bank statement. The balance of the accounting ledger should match to the balance of the bank statement. B.R.S. helps accounting firm to have an accurate view and also ensure that the company's bookkeeping is good.

The reconciliation process helps in bringing out the errors committed either in cash Book or Pass Book. Bank reconciliation statement may also show any undue delay in the clearance of cheques. Sometimes the cashier may have the tendency of cheating like he may made entries in the Cash Book only but never deposit the cash into bank. These types of frauds by the entrepreneurs staff or bank staff may be detected only through bank reconciliation statement.

Uncredited items They are deposits paid into the bank. These items occurred too close to the cut-off date of the bank statement and so do not appear on the statement. They will appear on the next statement. Unpresented cheques They are cheques issued by the firm that have not yet been presented to its bank for payment. Standing orders They are standing instructions from the firm to the bank to make regular payments.

Direct debits They are payments made directly through the bank. Bank charges They are charges made by the bank to the company for banking services used. Dishonoured cheques They are cheques deposited but subsequently returned by the bank due to the failure of the drawer to pay.

Cash Book (bank column only)

Debit represents an increase

Credit represents an decrease Bank Statement

Dr

Cr (represents increase)

Balance (represents the amount owned to the clients)

(represents decrease)

 Faster

processing Requirement of less manpower Easy identification of errors Error detection Completion Of CashBooK

ITEM Add: 1. 2. 3.

BANK RECONCILIATION STATEMENT AS ON .

Rs. Rs. xxx xxx xxx xxx xxx

Bank Balance as per cashbook/passbook

Less: 1. 2. 3. Balance as per other book xxx xxx xxx xxx xxx

Take the cashbook or passbook balance as starting point. Tick off the entries shown in both, Cashbook and Passbook. No adjustments needs to be made for them. Make necessary adjustment for entries omitted in one of the books, or both books. Finally reaching the balance as per the other book

In business most of the transactions relate to receipt of cash, payments of cash, sale of goods and purchase of goods. So it is convenient to have separate books for each such class of transaction, one for receipts and payments of cash, one for purchase of goods and one for sale of goods. Cash book is a subsidiary book which records the receipts and payment of cash. With the help of cash book cash and bank balance can be checked at my point of time.

 Simple

Cash Book. Two column cash book. Three column cash book. Petty cash book

When you open a savings account with a bank,the institution will give you a passbook, which contains the records of your transactions. A passbook helps keep track of your deposits into and withdrawals from your savings account

Current accounts: In current account, amount can be deposited and withdrawn at any time without giving any notice. It is also suitable for making payments to creditors by using cheques. Cheques received from customers can be deposited in this account for collection. In India, current account can be opened by depositing Rs.500 to Rs.1,000 Savings accounts: Savings accounts, also known as deposit accounts, are intended for money to be paid in but not often withdrawn. They usually offer higher rates of interest than current accounts but these too can vary so it is worth shopping around.

From the following particulars of Reema Traders, prepare a bank reconciliation statement on June 30,2006 1. Balance as per the cash book Rs.35,750 2. Rs.250 charges for Credit card fee is debited by bank, which is not recorded in cash book. 3. Cheques for Rs.7,550 are deposited in the bank but not yet collected by the Bank. 4. There was also a debit in the pass book of Rs.3,500 in respect of a discounted bill dishonoured.

Particulars
1. Balance as per Cash book
2. Credit card fee charges debited by the bank 3. Cheques deposited but not credited by the bank 4. Discounted bill dishonoured recorded only in Pass book

(Plus) Amount (Rs.)

35,750

(Minus) Amount (Rs.)

250

7550

3,500

Balance as per Pass book 35,750

24,450 35,750

Balance of Cash at Bank on 31 Mar 2009 Rs 50,000 Balance of bank account as per passbook Rs 53,200 On inspection it was founded that: 1) Cheques issued to Y on 28 Mar 2009 for Rs 7000, was presented for payment on 15 Apr, 2009 2) Cheques received from X on 31 Mar 2009 for Rs 3000, was deposited on 2 Apr 2009 3) Interest credited by bank on 31 Mar 2009 Rs 1200. No entry was passed in the Cashbook. 4) Cheques amounting to Rs 2000, deposited on 25 March 2009, were dishonored. No entry has been made for it in the Cashbook yet.

BANK RECONCILIATION STATEMENT AS ON MARCH 31, 2009

ITEM Rs. Rs.

Bank Balance as per CASHBOOK Add: 1. Interest credited by bank, not recorded 2. Cheque issued to Y, not yet presented Less: 1. Cheque received from X, not yet deposited 2. Cheque dishonored (3000) (2000) 1200 7000

50,000

58,200

(5000)

Balance as per PASSBOOK

53,200