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Bank Reconciliation Statement 14.11

BANK RECONCILIATION STATEMENT
FOR ACCOUNT NO. 1
as on 31st March, 2022
Particulars Amount Amount
Details (`) `
Overdraft Balance as per Cash Book (Cr.) 11,550
Add: Cheque paid in but not yet credited 3,600
Cheque of another party wrongly debited to Account No. 1 420 4,020
15,570
Less: Cheque issued but not yet presented 4,200
Cheque drawn on Account No. 1 wrongly debited to Account No. 2 5,200 9,400
Overdraft Balance as per Bank Pass Book (Dr.) 6,170

Illustration 9.
Cash Book of a trader showed an overdraft balance of ` 32,750 on 31st March, 2022. On scrutiny
of the Cash Book and Bank Pass Book it was discovered that:
(a) On 22nd March, sundry cheques totalling ` 6,500 were sent to bank for collection, out of
which a cheque of ` 1,500 was wrongly recorded on the credit side of the Cash Book and
cheques amounting to ` 3,300 could not be collected by the bank till 6th April.
(b) A cheque for ` 4,000 was issued to a supplier on 28th March. This cheque was not presented
to Bank till 10th April.
(c) Bank had debited ` 2,000 towards interest on overdraft and ` 600 for bank charges, but
the bank advice was sent on 15th April.
(d) Payments side of the Bank Column of the Cash Book was undercast by ` 100.
(e) Cheques for ` 2,000 drawn for office expenses were not encashed till 2nd April.
(f) A cheque for ` 1,000 was issued to a creditor on 27th March and was omitted to be entered
in the Cash Book. It was, however, presented to bank within 31st March.
(g) Dividends amounting to ` 500 had been paid direct to the bank and not entered in the
Cash Book.
You are required to make necessary corrections in the Cash Book and starting with the amended
balance, prepare a Bank Reconciliation Statement as at 31st March, 2022.

Solution:
Dr. AMENDED CASH BOOK (BANK COLUMN) Cr.
Particulars ` Particulars `
To Customer (Debtor) 3,000 By Balance b/d 32,750
(Wrong Credit Earlier)* By Interest on Overdraft 2,000
To Dividends 500 By Bank Charges 600
To Balance c/d 32,950 By Error in Casting 100
By Sundry Creditors (Omitted) 1,000
36,450 36,450

* A cheque received for ` 1,500 was wrongly recorded on the credit side of the Cash Book. For the
rectification of error, Cash Book should be debited by ` 3,000.