Loading....
Coupon Accepted Successfully!

 

Preparation of BRS with Adjusted Cash Book Balances

If the reconciliation is done at the end of the accounting period, it is recommended to prepare the adjusted cash book (with amended bank column) so as to reflect the correct bank balance as per the cash book. The next step should be to prepare the BRS in order to reconcile the correct balance as per the cash book with balance as per pass book. The steps involved in calculating the adjusted cash book balance, are as follows:
  1. Pass journal entries and posting in adjusted cash book for the entries or transactions causing difference between cash book and pass book due to error in cash book and all types of transactions causing timing difference except cheque issued and cheque deposited.
  2. The closing balance of adjusted cash book should be the starting point of BRS. Those entries or transaction causing difference between cash book and pass book due to error in pass book and timing difference due to cheque issued and cheque deposited should be considered in BRS.

Note: Bank balance as per adjusted cash book will be shown in the balance sheet.
All the adjustments that are considered in the adjusted cash book are not carried again to the Bank Reconciliation Statement.


Illustration 4

From the following particulars, prepare a BRS as on 31st March, 2012.

  1. Without amended cash book
  2. With amended cash book

Sl. No.

Particulars

1

Balance as per cash book

400

2

Cheques received and recorded in the cash book but not yet sent to bank for collectiodn

1,000

3

Cheques deposited into the bank but not recorded in the cash book

2,000

4

Cheques issued but not yet presented for payment

2,500

5

Cheques deposited but not yet collected by the bank

800

6

Bank charges debited in pass book

120

7

Bank interest allowed by bank

450

8

Telephone charges paid directly by bank

400

9

Cheques issued returned

200

10

A cash receipt recorded in bank column

1,000

11

A cash payment recorded in bank column

1,200

12

A wrong credit given in the pass book

600

13

Bills receivable directly collected by bank

800


Solution:

  1. Without amended cash book

Particulars

A. Balance as per cash book

 

400

B. Add: Cheques deposited into the bank but not recorded in cash book

2,000

 

Cheques issued but not yet presented for payment

2,500

 

Bank interest allowed in pass book only

450

 

Bills receivables directly collected by bank

800

 

Cheques issued returned on technical grounds

200

 

A wrong credit given by bank in pass book

600

 

A cash payment wrongly recorded in bank column

1,200

 

 

 

C. Less: Cheques received and recorded in bank column but not yet sent to bank for collection

1,000

7,750

Cheques deposited but not yet collected by the bank

800

 

Bank charges debited in pass book only

120

 

Telephone charges paid directly by bank

as per standing advice

400

 

A cash receipt wrongly recorded in bank column

1,000
 

 

3,320

D. Balance as per pass book

4,830

  1. With amended cash book
 

Dr. Cash Book (Amended Bank Column) Cr.

Particulars

Particulars

To Balance b/d

400

By Bank charges

120

To Cheque deposited but not recorded

2,000

By Telephone charges

400

To Bills receivable

800

By Cash receipt wrongly recorded

1,000

To Interest allowed

450

 

To Cheques issued returned

200

By Balance c/d

3,530

To Cash payment wrongly

1,200

 

 

recorded

5,050

 

5,050

 

Bank Reconciliation Statement as on 31-03-2014

 

Particulars

Adjusted bank balance as per amended cash book

 

3,530

A. Add: Cheque issued but not yet presented for payment

2,500

 

A wrong credit given by bank in pass book

600

3,100

B. Less: Cheques received and recorded in bank column but not yet sent

 

 

to bank for collection

1,000

 

Cheques deposited but not yet collected by the bank

800

1,800

Balance as per pass book

 

4,830





Test Your Skills Now!
Take a Quiz now
Reviewer Name