CBSE Class 11-commerce Answered

There are certain differences caused by time gap in recording the transactions relating either to receipts or payments.

1. Cheques issued but not presented for payment at the bank

   The firm/customer issues cheques to its suppliers and creditors, but not all these cheques are presented to the bank. The entry in the cash book is made immediately on issue of the cheque but the bank will not pass an entry until the cheque is presented for payment.

2. Cheques paid or deposited but not collected and credited by the bank

   Entry is passed by the firm in the cash book when it receives cheques from its debtors which increase the balance of the cash book. But the bank credits the firms account only when they have received the payment from the customer’s bank or in other words, once the cheque is collected by the bank.

3. Amounts directly deposited in the customer’s account

   There are times, when the firm’s debtors deposit money or make payments directly into the firm’s bank account. This results in an increase in the balance of the bank account. As no intimation is received from the firm, there will be no record of the same in the cash book.

4. Expenses directly paid by the bank on behalf of the customers

   Depending upon the instruction of the customer, the bank makes regular payment on behalf of the customer. The bank debits the customers/firms account when the payment is made but the firm/customer will pass the entry in his book only after he receives the bank statement.