Cash book and passbook difference

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cash book and passbook difference

What are the main reasons of difference between pass book and cash book? - rumahhijabaqila.com Specialties

Topics: Literature. In other words we can say that always opposite entry in cash book and pass book. The bank pass book indicates the amount paid into the bank and the amount withdrawn there form. The pass book balance or any given data must be the same as the balance shown by the bank column of the cash book on the same date. The reason responsible for the difference may e delay in intimation, time gap between recordings of transaction in cash book and pass book due to errors and omissions in cash book and pass book.
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How to make Bank Reconciliation Statement-(Video-2) Reasons of Differences in Cash Book & Pass Book

The relationship between the customer and the banker is that of a creditor and a debtor.

Bank Reconciliation Statement

There are end number of transactions occur in the normal course of business, where in receipt or payment is made in cash or cheque. To record these transactions the entity uses cash book and contains all the details of the receipts and disbursements that are recorded chronologically. Many times cash book is juxtaposed with Passbook, but there is a slight difference in the two. With the help of pass book, banks inform their customer about the status of their account. There are a few differences between cash book and pass book which are discussed in this article in detail, have a look.

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Difference between Cash Book and Pass Book :. Entered on the debit side of the cash book on the date of depositing the cheques into the bank., Ans : A bank reconciliation statement is prepared for finding out the causes for the difference between the balances of a cash book and passbook, and to reconcile their balance. Ans : Overdraft means the amount overdrawn from the bank.

Meaning and concept of Bank Reconciliation Statement A bank reconciliation statementis such a statement which is prepared to show how the Bank Balance as per Cash Book and the Bank Balance as per Pass Book use to differ each other. Generally, a modern business performs its transactions through bank. While doing so, it receives cash through bank deposits and makes the cash payments by issuing the cheques. To keep records of its transactions, the bank maintains a cash book, with bank columns. It is in fact the bank account in the books of the business. On the other hand, bank also maintains customer's account in their books.

Reconciling a bank account implies ensuring that the bank account balance as per the Cash Book is agreeing with the balance as per the Pass Bank book after taking into consideration all the reasons for the difference in the balance. If after taking into consideration all the reasons for the difference in balances as shown by both the books and making adjustments to the balance as shown by one of the books, we arrive at the balance as per the other book, then we assure ourselves that the balance as revealed by both the books is agreeing. The ledger account balances appearing in the Balance Sheet of an organisation would therefore be the balances of the ledger accounts balances in their books. The Bank Reconciliation Statement is an additional statement that is prepared to serve some purpose, i. The objective of preparing a BRS bank reconciliation statement is not to adjusting the figure in the balance sheet or the ledger account. In the Bank's Balance sheet, the balance in the customer account as shown by the pass book would find its way into the balance sheet. Start with CB balance, deduct the amount involved in the transaction to arrive at the PB balance.

Cheques received are entered in the Cash Book as soon as they are received. There may be a delay of a day or two in sending the cheques to the bank. Moreover, the bank, usually, does not credit the customer until the cheques are realized; if they are on other banks, it means delay. As soon as cheques are issued, they are entered in the Cash Book, but the bank, again, makes no entry until the cheques are actually presented for payment and are paid. This means that the bank shows a higher balance in favour of the client than what the Cash Book of the client shows.

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