What is bank reconciliation statement and why is it prepared?
Asked by Topperlearning User | 15th Jul, 2016, 04:31: PM
Bank reconciliation statement is prepared by a person who is holding an account with a bank on a particular date. Basically, it helps to reconcile the bank balance as per cash book with the balance as per bank pass book and shows those entries which caused differences between the two balances.
Bank reconciliation statement is prepared to show the reason and causes of differences in balances and pass the required entries in the books of account.
Answered by | 15th Jul, 2016, 06:31: PM
- What is the need and purpose of preparing a bank reconciliation statement?
- Explain in brief the reason for the difference caused by “cheques paid into the bank but not yet collected” with an example.
- Explain the causes/reasons for the disagreement between the cash book balance and the passbook balance.
- Explain briefly 4 reasons for disagreement between the cash book balance and the passbook balance caused because of time gap.
- Give two examples of errors committed by the firm in recording transactions in the cash book.
- Give two examples of errors committed by the bank in recording transactions in the passbook.
- List 4 items having an effect of higher balance in the passbook.
- List 4 items having an effect of higher balance in the cash book.
- What is debit balance and credit balance as per cash book and bank pass book?
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