Bank Reconciliation Statement (BRS)

Types of Cheque

Bearer Cheque Crossed Cheque

Bearer Cheque:
(i) Suppose accountant of the business writes a bearer cheque of MCB Bank and gives it to Ali.
(ii) Ali will go to MCB Bank to get cash.
(iii) Ali will give the cheque to the Bank Cashter.
(iv) Cashier will verify the balance in the account of the business..
(v) If balance exists Cashier will give the cash to Ali.

Crossed Cheque:
(i) Suppose accountant of the business writes a crossed cheque of MCB Bank and gives it to Ali.
(ii) Ali will go to the Bank where his own account exists (suppose in HBL).
(iii) Ali will deposit the cheque in his account in HBL.
(iv) HBL will send the cheque to MCB for balance verification.
(v) MCB will verify the balance and sent the cash to HBL if cash balance exists in account of the business.
(vi) HBL will transfer the amount to Ali’s Account.
(vii) If suppose Ali wants cash he will write a cheque of his own A/c.
For the purpose of security of payment generally payments are made by crossed cheque.

Transactions of Business with Bank:

Honda Ltd. Meezan Bank
(i) Business deposited Rs. 50,000 Cash into Bank:
Mezan Bank 50,000 Cash 50,000
Cash 50,000 Honda Ltd. 50,000
(ii) Business withdrawn Rs. 10,000 from Bank:
Cash 10,000 Honda Ltd. 10,000
Meezan Bank 10,000 Cash 10,000
(iii) Crossed cheque received from a customer Rs. 500,000 (Name of customer is Hassan). Assume Hassan
has account in Meezan Bank
Meezan Bank 500,000 Hassan A/c 500,000
Debtor - Hassan 500,000 Honda Ltd. 500,000
(At the time of receipt of cheque) (At the time of clearance of cheque)
(iv) Crossed cheque given to supplier (Zeshan) Rs. 100,000. Assume Zeeshan has A/c in Meezan Bank
Creditor - Zeshan 100,000 Honda Ltd. 100,000
Meezan Bank 100,000 Zeeshan A/c 100,000
(At the time of issuance of cheque) (At the time of clearance of cheque)
(v) Bank charges deducted debited by bank Rs. 500
Bank charges 500 Honda Ltd. 500
Meezan Bank 500 Bank Service Income 500

(vi) Interest income credited by bank Rs. 1,000

Meezan Bank 1,000 Interest Expense 1,000
Interest Income 1,000 Honda Ltd. 1,000

Ledger of Meezan Bank (prepared by Honda Limited)

Cash 50,000 Cash 10,000
Debtor – Hassan 500,000 Creditor – Zeeshan 100,000
Interest Income 1,000 Bank charges 500
Balance c/d 440,500
551,000 551,000

*Ledger of Honda Ltd. (prepared by Meezan Bank)

Cash 10,000 Cash 50,000
Zeeshan A/c 100,000 Hassan A/c 500,000
Bank Service Income 500 Interest Expense 1,000
Balance c/d 440,500
551,000 551,000
*the ledger of customer prepared by bank is called as bank statement or pass book.
Page 1 of 32
Conclusion:
If all transactions are correctly recorded by both the bank and business in the same accounting period, then
balance as per bank account (prepared by business) and balance as per bank statement (prepared by bank)
should be equal but opposite in name.

Points to remember:
 Ledger prepared by business related to its bank is called as bank account or cash book (bank column).
 Ledger prepared by bank related to its customer is called as bank statement / pass book.

CASH BOOK
CASH BANK CASH BANK

Bank Reconciliation Statement:

If there is a difference between bank account and bank statement, then a separate page (a statement) is also
prepared by business in addition to bank account to explain the reasons of difference.
Reasons of Differences between Cash Book (Bank Column) & Bank Statement
1. Items in bank statement not yet recorded in bank account e.g.
Bank Charges debited by bank.
Bank interest credited by bank
Accounting Treatment:
These items are recorded in bank Account (cash book (bank column))

2. Items in cash book (bank column) not yet recorded in bank statement.e.g.
(i) Un-presented Cheques/outstanding cheques:
Cheques issued and credited in bank A/c but not yet debited in bank statement.
Cheque issued on 29-12-2014
Bank statement date is = 31-12-2014
Cheque cleared on 2-1-2015
(ii) Un-credited Cheques:
Cheques received and debited in bank account but not yet credited in bank statement.
Accounting Treatment:
These cheques are written in Bank reconciliation statement until recorded by bank in bank statement.

3. Errors in Cash Book: (Bank Column)

Accounting Treatment:
These errors are corrected in cash book (Bank column)

4. Errors in Bank Statement:

Accounting Treatment:
These errors are temporarily corrected in Bank reconciliation statement until corrected by bank.

Page 2 of 32
 th
Q. 1 Prepare a bank reconciliation statement as at 30 September,2001 from the following entries in the Bank
column of the Cash book and corresponding Passbook.
Cash book (Bank Column Only)
2001 Rs. 2001 Rs.
Sep,1 b/d 8,000 Sep,4 Drawings 700
Sep,3 Raja Kamran 2,200 Sep,8 Suleman 3,300
Sep,9 Rashid 1,500 Sep,12 Salary 2,800
Sep,16 Rao Nadir 3,400 Sep,16 Saleem 1,700
Sep,23 Rahim 2,600 Sep,18 Surtaj 4,200
Sep,27 Rauf 100 Sep,21 Sawan 2,000
Sep,30 Rao Nisar Umar 350 Sep,26 Sarwar 1,100
Sep,30 Commission 100
Sep,30 c/d 2,250
18,150 18,150

Bank Pass Book

2001 Particulars Debit Credit Balance(Cr.)
Sep,1 b/d 8,000
Sep,4 Cheque-Drawings 700 7,300
Sep,9 Cheque-Raja Kamran 2,200 9,500
Sep,11 Cheque-Suleman 3,300 6,200
Sep,12 Cheque-Rashid 1,500 7,700
Sep,17 Cheque-Salary 2,800 4,900
Sep,20 Cheque-Saleem 1,700 3,200
Sep,30 Cheque-Rahim 2,600 5,800
Cheque-dividend 900 6,700
Bank charges 15 6,685
Electricity Bill 60 6,625
Cheque Comission 100 6,525
Note: unadjusted debit balance is written on the debit side of respective ledgers while unadjusted credit
balance is written on credit side of respective ledger.

Q. 2 In preparing its bank reconciliation at June30, 2001 Carefull company has made available the following
data:
i. Balance as per bank statement June 30, 2001 38,025
ii. Deposit in transit June 30, 2001 5,200
iii. Outstanding cheques June 30, 2001 6,750
iv. Amount erroneously credited by bank to Carefull’s account June 28, 2001 400
v. Bank service charges for June 75
Required:
Workout Care full Company’s adjusted balance as per cash book at June30, 2001 by preparing a BRS.
Note: if nothing is mentioned then assume that the balance as per bank statement is credit balance while
balance as per cash book is a debit balance.
Deposits in transit is an other name of uncredited cheques while outstanding cheques is an other name of
unpresented cheques
Dishonoured Cheques:
A cheque that is not cleared and therefore balance is not transferred.
If Cheque Received is dishonoured: If the cheque issued is dishonoured:
Bank 100,000 Creditor 50,000
Debtor 100,000 Bank 50,000

Debtor 100,000 Bank 50,000

Bank 100,000 Creditor 50,000
(Dishonoured cheque) (Dishonoured cheque)
Pay-Order/Demand Draft:
Pay-order is just like a crossed cheque but it is not dishonoured because it is prepared by bank after receiving
the amount to be paid against it.

Page 3 of 32
Q. 3 On December31,2001 the bank column of Salims cash book showed a debit balance of Rs.4,610. On
examination of the cash book and bank statement you find that:
1) Cheques amounting to Rs.6,300 which were issued to the creditors and entered in the cash book
before December 31,2001 were not presented for payment until after that date.
2) Cheques amounting to Rs.2,500 had been recorded in the cash book as having been paid into the
bank on December 31,2001 but were entered in the bank statement on January1,2002.
3) A cheque for Rs.730 had been dishonoured prior to December31, 2001, but no record of this fact
appeared in the cash book.
4) A Dividend of Rs.380 received direct into the Bank had not been recorded in the Cash book.
5) Bank intrest and charges amounting to Rs.420 had been charged in the bank statement but not
charged in the cash book.
6) No entry had been made in the cash book for a trade Subscription of Rs.100 paid by pay-order in
November 2001.
7) A cheque book for Rs.10 had been entered in the cash book twice.
8) A cheque for Rs.270 drawn by Salam had been charged to Salim’s bank account in the error by bank in
December 2001.
You are Required :
a) To make appropriate adjustments in the cash book to find the adjusted balance and
b) To prepare a statement reconciling the adjusted balance in the cash book with the balance
shown in the bank statement.
Normally:
Balance in Cash Book Balance in Bank Statement
Dr. Cr.
Exception is Overdrawn Balances (when business has taken extra funds from bank)
Cr. Dr.

Example when Bank Account has overdrawn balance (overdrawn balance is also called as overdraft balance):
b/d 50,000 Creditor 700,000
Debtors 500,000
c/d 150,000
700,000 700,000
Casting: (Total)

Under casting Over casting

A bank account has two sides:

Debit side – also called as receipt side
Credit side – also called as payment side
th
Q. 4 According to M’s cash book, there was a balance of Rs. 3,000 overdrawn in 30 June 2016, in his No.1 bank
Account.
On Investigation you find:
(i) Cheques drawn amounting to Rs. 5,000 had not been presented.
(ii) Cheques Rs. 2,500 entered in the cash book as paid into bank, had not yet been cleared.
(iii) A cheque for Rs. 1,200 drawn on his No. 1 account has been charged by the bank to his No. 2 account
(iv) The payment side of the cash book has been under cast by Rs. 700
(v) A Dividend Rs. 400 paid direct to the bank had not been recorded in the cash book
(vi) Bank charges of Rs. 300 entered in to the bank statement had not been entered in the cash book
(vii) A cheque of Rs. 500 paid into the bank had been dishonored and
(viii) Bank charges of Rs. 10 entered in to the bank statement had not been entered in the cash book

Required :
a) Show the appropriate adjustments to be made In the cash book, and
b) Prepare a bank reconciliation statement for the No. 1 account as on 30.06.2016

Page 4 of 32
 Q. 5 In the books of T Co the bank account shows a balance overdrawn of 6,530 as at 31 December 20X8. On
comparing the bank statements with the cash book the following items are discovered:
1. Bank charges of 100 and overdraft interest of 50 have been omitted.
2. Cheques received from customers totaling 1,900 have not yet been cleared by the bank.
3. Cheques drawn in favor of suppliers amounting to 2,300 are outstanding at the year end.
4. A credit transfer from a customer of 2,000 was not recorded in cash book.
5. A direct debit to a supplier of 1,000 was omitted in cash book.

A) What figure will be shown in the balance sheet as at 31 December 20X8 for ‘bank overdraft1?
a) 5,480
b) 5,680
c) 6,130
d) 7,380
B) Assuming that the above items are all that is required to reconcile the cash book balance to the
balance per the bank statement, what balance did the bank statement show as at 31 December 20X8?
a) 5,280 overdrawn
b) 6,080 overdrawn
c) 7,780 overdrawn
d) 8,580 overdrawn

Q.6 Summary of the cash book of Rectify Co for the year to 31 May 20X5 is as follows:
Cash Book
Opening balance b/d 805 Payments 146,203
Receipts 145,720 Closing balance c/d 322
146,525 146,525

After some investigation of the cash book and vouchers you discover that:
1) bank charges of 143 shown on the bank statement have not yet been entered in the cash book;
2) a cheque drawn for 98 has been entered in the cash book as 89, and another drawn at 230 has been
entered as a receipt
3) a cheque received from a customer for 180 has been returned by the bank marked refer to drawer',
but it has not yet been written back in the cash book;
4) an error of transposition has occurred in that the opening balance of the cash book should have been
brought down at 850;
5) cheques paid to suppliers totaling 630 have not yet been presented at the bank, whilst payments in to
the bank of 580 on 31 May 20X5 have not yet been credited to the company’s account;
6) a cheque for 82 has been debited to the company’s account in error by the bank;
7) standing orders appearing on the bank statement have not yet been entered in the cash book:
a. interest for the half year to 31 March on a loan of 20,000 at 11% pa;
b. Lease repayments on the managing director’s car -12 months at 55 per month;
c. Dividend received on a trade investment - 1,147
8) a page of the receipts side of the cash book has been under cast by 200;
9) The bank statement show a bank overdraft of 870
Required: Prepare a bank reconciliation statement as on 31 May 20X5. Also prepare an adjusted cash book
Note: standing order means instructions to bank to make specified payments at specified fixed dates.
Error of transposition means figures are misplaced.

Q.7:
On 30 June 2015, the bank book of Ranjah Enterprises (RE) reflected a credit balance of Rs. 3,450,000 whereas
the bank statement showed an overdraft of Rs. 2,415,000. On scrutinizing the record, following issues were
discovered:
(i) Cheques deposited in bank in the last week of June 2015, amounting to Rs. 1,550,000 were wrongly
credited in the bank book. Out of these, cheques amounting to Rs. 1,050,000 were cleared by the bank
in July 2015 whereas a cheque of Rs. 500,000 deposited on 29 June 2015 was dishonoured by the bank.
(ii) Financial charges on bank overdraft amounting to Rs. 750,000 were recorded in the bank statement.
However, review by the Accounts Officer indicated an error and RE recorded the correct amount of Rs.
510,000 in the bank book. The error was corrected by the bank on 10 July 2015.
(iii) A cheque issued to a supplier amounting to Rs. 4,005,000 was entered in the bank book as Rs.
4,050,000. However, the bank erroneously recorded the amount as Rs. 4,500,000.
(iv) A supplier was issued a cheque of Rs. 125,000 in place of a time barred cheque on 25 June 2015 and was
cleared on the next day. However, the cancellation of time barred cheque was not recorded by RE.
(v) A payment of Rs. 50,000 through cheque was recorded twice in the bank book.
Page 5 of 32
Required:
Determine the correct balance that should be reported in the bank book and prepare a statement reconciling
the corrected balance with that shown in the bank statement. (09)
Note: time barred cheque means a cheque which is more than 6 months old.

Q.8 The Cash Book and Bank Statement of Neha International appeared as follows:
Cash Book (Bank column only)
Amount in Rupees
Date Particulars Dr. Cr. Balance
01.06.05 Balance b/d 78,000 78,000
04.06.05 Sami Imports 12,000 66,000
05.06.05 Asim Packaging 15,000 81,000
08.06.05 Deen Exports 18,000 99,000
10.06.05 Roohi Exports 30,000 69,000
15.06.05 Samar International 19,500 88,500
16.06.05 Hina Imports 7,500 81,000
27.06.05 Channa Exports 16,500 97,500

Bank Statement - Details

Amount in Rupees
Date Particulars Dr. Cr. Balance
01.06.05 Balance b/d 82,500 82,500
02.06.05 Kamal 3,000 85,500
03.06.05 Suman 15,000 100,500
05.06.05 Asim Packaging 15,000 115,500
08.06.05 Sami Imports 12,000 103,500
08.06.05 Deen Exports 18,000 121,500
09.06.05 Beeta 9,000 112,500
17.06.05 Profit on Certificates of investment 75,000 187,500
18.06.05 Samar International 19,500 207,000
27.06.05 Bank charges 3,000 204,000
The bank reconciliation for the month of May 2005 is as follows:
Bank Reconciliation Statement As at May 31, 2005
Rs.
Balance as per cash book 78,000
Add: Cheques issued but not presented
J.B.&Co. 7,500
Flash & Co. 6,000
Beeta 9.000 22,500
100,500
Less: Cheques deposited but not cleared
Suman 15,000
Kamal 3,000 18,000
Favorable balance as per bank statement 82,500
Required:
Bank reconciliation statement as at June 30,2005. Also prepare an adjusted cash book
th
Q. 9 According to cash book there was a balance of Rs30,000 overdrawn on 30 June,2013 in his bank.
On investigation you find that:
a) Cheques Drawn Amounting to Rs.50,000 had not been presented.
b) Cheques of Rs.25,000 entered in cash book as paid into bank, had not been cleared.
c) A Cheque of Rs.12,000 drawn by the company had been charged by the bank to another account.
d) A cheque of Rs.7,000 issued by the business has not been recorded in cash book.
e) A dividend of Rs.4,000 paid direct to the bank had not been recorded in cash book.
f) Bank charges of Rs.3,000 entered in Bank statement had not been entered in cash book.
g) A dishonor cheque of Rs.5,000 has not been recorded in cash book.
h) A cheque book of Rs. 100 has not been entered in cash book.
th
Required Prepare bank reconciliation statement as on 30 June, 2013 and pass journal entries for the
transaction to be recorded in cash book.
Note: if accounting entries are required in a question of BRS then prepare entries of items appearing in cash
book only.

Page 6 of 32
Q. 10 The bank book for the month of February 2013 of Abid Ali & Brothers is as follows:

Bank Book
Date Rupees Date Cheque Rupees
01-02-13 Opening Balance 991

05-02-13 Ayaz 2,386 04-02-13 Kashif Ltd. 184 3,120

05-02-13 Ayub 3,009 07-02-13 Qasim & Sons 185 4,092
10-02-13 Babar 186 918
13-02-13 Zahid Ltd. 15,414 12-02-13 Supei Ltd - DD 565
21-02-13 Zubair Merchant 12,221 17-02-13 Mateen 187 2,441
27-02-13 Athar 2,055 18-02-13 Mazhar 188 4,588
23-02-13 Tabish Ltd. - SO 1,229
24-02-13 Salaries 4,771
25-02-13 Ilyas 189 947
26-02-13 Akbar 190 1,652
28-02-13 Closing balance 11,753
36,076 36,076

The Bank Statement for February 2013 appears as follows:

Date Description Debit Credit Balance

01-02-13 Balance 3,633

01-02-13 Cheque 182 440 3,193
01-02-13 Cheque 181 2,202 991
03-02-13 Cash deposit 2,386 3,377
03-02-13 Cash deposit 3,009 6,386
06-02-13 Cheque 184 1,320 5,066
09-02-13 DD – Waqas 551 4,515
12-02-13 DD - Super Ltd. 565 3,950
13-02-13 Clearing 15,414 19,364
19-02-13 Cheque 185 4,092 15,272
20-02-13 Cheque 187 2,414 12,858
21-02-13 Clearing 12,122 24,980
23-02-13 Tabish Ltd. - Standing Order 1,229 23,751
24-02-13 Salaries transfer 4,771 18,980
26-02-13 Yasir - Standing Order 918 18,062
27-02-13 Cheque 188 5,488 12,574
28-02-13 Bank Charges 459 12,115

The bank reconciliation for the month of Jan 2013 is as follows:

Bank Reconciliation Statement As at January 31, 2013
Rs.
Balance as per bank statement 3,633 Cr
Cheques issued but not presented
182 440
181 2,202 2,642 Dr
Balance as per cash book 991 Dr

Required:
A bank reconciliation statement for Abid Ali & Brothers as at 28 February 2013 after incorporating necessary
entries/corrections in the bank book. All amounts appearing in the bank statement are correct. (13)

Page 7 of 32
Q. 11 Following information has been extracted from the records of Eden Garments (EG), as at
30 June 2016:

Rupees
Balance as per bank book (debit balance) 760,000
Balance as per bank statement (overdraft) 1,490,850

An examination of the bank book and the bank statement, revealed the following:
(i) Outstanding cheques amount to Rs. 3,856,000 and include:
 a cheque of Rs. 50,000 issued to a supplier bearing an incorrect payee's
name. The cheque was returned and recorded on 15 July 2016.
 a cheque issued to a supplier for Rs. 85,000 was recorded in bank book as Rs.
58,000.
 a cheque dated 20 December 2015 for Rs. 4,630 issued for repair of a car was
misplaced. The repair charges were paid in cash and the misplacement of the
cheque was not recorded.

(ii) Un-cleared cheques amount to Rs. 6,460,000 and include:

 a cheque of Rs. 366,000 received from a customer was returned by the bank
as amount in words was not in conformity with the amount in figures. The
return was not recorded and the cheque was sent to the customer for
replacement.
 a cheque of Rs. 76,000 received from a customer in settlement of an invoice
availing payment discount of 5%. The collection was recorded by EG at gross
amount of invoice.

(iii) An unidentified credit of Rs. 354,000 was appearing in the bank statement. It was found that a
customer had made an online transfer to avail 5% discount allowed on payments made by 30
June 2016.

(iv) Following debit/credit advices dated 30 June 2016 were received from the bank on
5 July 2016:
 Bank charges amounting to Rs. 7,850. It has been noted that the bank had over charged EG by
Rs. 1,250.
 Dividend collected by the bank amounting to Rs. 50,000.
 Payment on EG’s standing instruction of an annual subscription for a magazine amounting to
Rs. 12,000.

Required:
(A) Post relevant transactions to bank book of EG to arrive at the correct bank balance as at 30 June
2016. (07)
(B) Prepare a bank reconciliation statement for the month of June 2016 to arrive at the adjusted
bank balance as per EG's books. (03)
Q. 12
Mr. Ahmed is a sole trader and carries on business under the name "Ahmed & Company". The balance on his cash
book at 31 December 2011 did not agree with the balance as per the bank statement which shows a credit balance
of Rs. 367,500.
An examination of the cash book and bank statement disclosed the following:
(i) A deposit of Rs. 49,200 made on 29 December 2011 had been credited by the bank on 1 January 2012.
(ii) Bank charges of Rs. 1,700 have not been entered in the cash book.
(iii) A cheque received from a customer had been returned from bank marked ‘out of date’. The cheque was re-
dated by his customer and paid into the bank again on 3 January 2012. The return of cheque has not been
recorded.
(iv) A standing order for payment of an annual subscription amounting to Rs. 1,000 has not
been entered in the cash book.
(v) On 26 December 2011, Mr. Ahmed had given the cashier a cheque for Rs. 10,000 to pay into his personal
account at the bank. The cashier deposited it into the business account by mistake. The cheque was credited
to bank on 27.12.2011.
(vi) On 27 December 2011, a customer had made an online transfer of Rs. 49,900 in payment against goods
supplied. The advice was received and recorded in the cash book on 2 January 2012.
(vii) On 30 September 2011, Mr. Ahmed entered into a hire purchase agreement and issued a standing order to
the bank to pay a sum of Rs. 2,600 on the 10th day of each month, commencing from October 2011. No
entries have been made in the cash book for these payments,

Page 8 of 32
(viii) A cheque for Rs. 36,400 received from Mr. Bashir had been entered twice in the cash book,
(ix) Cheques issued amounting to Rs. 467,200 had not been presented to the bank for payment until after 31
December 2011.
(x) A customer who owed Rs. 20,000 and was entitled to a cash discount of 2'/ 2% paid a cheque for the net
amount on 10 December 2011. The cashier erroneously recorded the gross amount in the bank column of the
cash book.
(xi) Dividend collected by the bank amounting to Rs. 12,000 has not been recorded in the cash book.
(xii) A cheque of Rs. 243,000 received from Mr. Bilal was deposited in the bank but entered in the cash book
as Rs. 234,000.
Required:
(a) Prepare a bank reconciliation statement as on 31 December 2011.
(b) Prepare necessary journal entries in the books of Ahmed & Company and determine the
correct cash balance that should be reported in the balance sheet. Also specify the
situations in which no adjustment/entry is required. (13 marks)

Q. 13 The following bank reconciliation statement pertains to Comforts Travels for the month of
February 2017:

Rupees
Balance as per bank statement 3,258,000
Outstanding cheques (869,200)
Cheques deposited and under clearance 456,350
Debit advices for bank charges received in March 2017 9,240
Un-reconciled difference (9,000)
Balance as per bank book 2,845,390

Scrutiny of the bank book and bank statements revealed the following:
(i) Outstanding cheques include:
 a cheque of Rs. 37,250. The cheque was recorded in the bank book as Rs.
32,750. A cheque amounting to Rs. 9,650 which is outstanding since 8 June
2016. Cheques outstanding for more than six months are not honoured by
the bank.
(ii) Cheques under clearance include a post-dated cheque of Rs. 35,000 received from a customer on 27
February 2017. The cheque was deposited in the bank on 28 February 2017. The date of the cheque
was 1 March 2017.
(iii) The bank charges include an amount of Rs. 2,500 which was subsequently reversed by the
bank.
(iv) Un reconciled difference in above bank reconciliation statement represents a page total of
payment side of the bank book amounting to Rs. 4,589,000 was carried forward to the next
page as Rs. 4,598,000.

(v) The debit side of the bank book is under casted by Rs. 4,500.
Required:
 Post relevant transactions to the bank book to arrive at the correct balance as at 28 February 2017.
 Prepare a revised bank reconciliation statement for the month of February 2017 using the corrected
bank book balance.
Concept of post-dated cheque.

Q.14
The newly appointed accountant of Fine Works Limited has prepared the following bank reconciliation
statement for the month of December 2013:

Description Rupees
Balance as per bank statement as at 31 December 2013 1,721,490
Outstanding cheques:
Cheque No. Date Rupees
620 25-Jun-2013 35,000
765 15-Dec-2013 435,630
789 28-Dec-2013 635,700
795 20-Jan-2014 325,690
(1,432,020)
Cheques deposited still under clearance 535,635
Unidentified credit appearing in the bank statement (190,000)
Balance as per bank book as at 31 December 2013 635,105

Page 9 of 32
On reviewing the bank book and the bank statement, the following information has been obtained:
(i) The correct amount of outstanding cheque no. 765 appearing in above BRS is Rs. 453,630. However, the
amount is correctly recorded in the cash book.
(ii) The unidentified credit is for cash deposited directly into the bank by a customer to avail agreed 5%
discount on payment within one week.
(iii) A bank debit advice dated 31 December 2013 for bank charges amounting to Rs. 6,570 for the month of
December 2013 was received on 3 January 2014 and recorded in the bank book in January 2014.
(iv) The debit side total of the bank book has been overcast by Rs. 11,430.
(v) Cheques outstanding for more than six months are not honoured by the bank.
Required:
(a) Prepare necessary accounting entries for the month of December 2013. (06)
(b) Prepare a revised bank reconciliation statement. (04)

Question -15
Ex Zed & Co. maintains their Current account and PLS Account with Aggressive Bank Ltd. Bank has instructions
to credit all the remittances received in name of company only in Current Deposit Account. The Statement of
Account sent by the bank for the period 1st January, 1990 to 31st January, 1990 showed the following
balances:
Rupees
(i) CD Account (Overdraft) 11,503
(ii) PLS Account 263,508
The balances shown by the bank did not tally with the balances shown by the books of the company which
were as under:-
Rupees
(i) CD Account 6,594
(ii) PLS Account 236,253
On scrutiny following discrepancies were noted by the Accountant;
(a) IN THE BOOKS OF COMPANY:
(i) A cheque for Rs. 5,667 issued from CD Account was recorded in PLS Account.
(ii) A sum of Rs. 25,000 deposited in PLS Account was recorded in CD Account.
(iii) Bank's Godown-keeper's salary of Rs. 750 charged to CD Account by the bank remained unrecorded.
(iv) Cheque for Rs. 8,563 deposited in the CD Account was dishonoured and returned to the company in
February, 1990.
(v) Three cheques for Rs. 8,993, Rs. 5,445 and Rs. 11,633 issued from CD Account by the company
remained unpaid.
(vi) A letter sent to the bank to transfer a sum of Rs. 25,000 from PLS Account to CD Account remained
unrecorded.
(vii) A cheque for Rs. 15,600 issued in name of Best Furnishers from CD Account against purchase of
furniture was cancelled in January but the necessary entry was not made in the books.
(b) IN THE BOOKS OF BANK:
(i) Profit of Rs. 11,577 on PLS Account was credited to CD Account.
(ii) Miscellaneous charges of Rs. 335 were charged to PLS Account instead of CD Account
(iii) Remittance of Rs. 33,500 was credited to PLS Account, instead of CD Account
(iv) A cheque of Rs. 23,200 was credited by bank on Feb 2, 1990. This amount was recorded in the books
of company on 29th January , when the cheque is received.
You are required to:
(i) Pass the Journal entries in the books of the company wherever necessary.
(ii) Compute the correct balances as per books of the company on 31st January, 1990.
(iii) Prepare bank reconciliation statement of both the banks. (20)
(May 1990, C.A Inter-1}

Page 10 of 32
Q.16 The bank statement of AB Traders showed an overdraft of Rs. 272,000 as at June 30, 2006. The bank book
showed an overdraft of Rs. 730,718. An examination of the bank book and bank statement disclosed the
following:
(i) A cheque of Rs. 49,200 deposited on June 29, 2006 had been credited by the bank on July 1, 2006.
(ii) Bank charges amounting to Rs. 1,700 had not been entered in the bank book.
(iii) A cheque received from a customer had been returned by bank marked ‘ out of date’. The cheque had
been re-dated by the customer and deposited into the bank again on July 3, 2006. The return of
cheque has not been recorded in the books of comapny
(iv) A payment under a standing order, for annual subscription amounting to Rs. 1,000 had not been
entered in the bank book.
(v) On June 25, the Managing Director had given the cashier a personal cheque of Rs. 10,000 for
depositing into his personal account at the bank. The cashier had deposited it into the company's
account by mistake. It was credited in the bank statement on June 27.
(vi) On June 27, two customers of AB Traders had paid direct in the company's bank account Rs. 49,900
and Rs. 15,700 respectively as payment against goods supplied. The advices were not received by the
company until July 4 and were entered in the bank book on that date.
(vii) On March 30, 2006 the company had entered into a lease agreement to pay by banker's order a sum
of Rs. 2,600 on the 10th day of each month commencing April, 2006. No entries had been made in the
bank book.
(viii) Rs. 36,400 deposited into the bank had been entered twice in the bank book.
(ix) Cheques issued amounting to Rs. 467,200 had not been presented to the bank for payment until after
June 30, 2006.
(x) A customer was given a cash discount of 2.50% on payment of Rs. 20,000 on June 10. The cashier
entered the gross amount in the bank book.
(xi) The bank sent a debit advice of Rs. 16,718 being interest on overdraft for 6 months to June 30, 2006. It
had been entered in the bank book twice.
Required: Show necessary adjustments in the bank book and prepare a bank reconciliation statement as on
June 30, 2006.
Concept of three column cash book

Q. 17 While reconciling the bank statement with the cash/bank book of ABC Textiles for the year ended
December 31, 2009, you noted the following:
Rupees
(i) Balance as per bank statement at December 31, 2009 overdrawn 806,436
(ii) Cheques drawn but not presented till December 31, 2009 377,784
(iii) Mark-up on overdraft charged by the bank on January 2, 2010 was wrongly recorded in 118,686
the cash/bank book on December 31, 2009
(iv) Collections made on December 30 and 31, 2009 were not cleared with the bank till 250,600
January 3, 2010
(v) A cheque which was due on December 29, 2009 was sent to the bank for collection on 196,500
December 28, 2009, and entered in the cash/bank book (However, the proceeds were
credited by the bank on January 1, 2010)
(vi) Subscription for a magazine was paid by the bank, as per the auto-debit instructions, on 3,144
December 1, 2009. This transaction has not been recorded in the cash/bank book so far
(vii) A time-barred cheque was replaced with a new cheque on December 30, 2009 and 5,000
entered in the cash/bank book without the previous cheque being cancelled / reversed.
Both the cheques are included in (ii) above
(viii) Discount allowed on prompt payment has been included in the bank column of cash 10,500
book.
(ix) A cheque received on December 21 was erroneously recorded on the credit side of the 7,500
cash/bank book
(x) A cheque for Rs.125,000 drawn by the company to pay for a new item of plant had 12,500
been mistakenly entered in the cash/bank book as
(xi) A cheque issued by the company has been entered in the credit column of the bank 13,200
statement
Required: Prepare a bank reconciliation statement as at December 31, 2009 and identify the amount to be
carried to the balance sheet as "Cash at Bank". Also prepare an adjusted cash book (09)
Time barred cheque: means a cheque which is more than six months old.

Page 11 of 32
Q. 18 test question
Following information has been extracted from the records of Eden Garments (EG), as at 30 June 2016:

Rupees
Balance as per bank book (debit balance) 800,000
An examination of the bank book and the bank statement, revealed the following:
(i) Outstanding cheques amount to Rs. 3,856,000 and include:
 a cheque of Rs. 50,000 issued to a supplier bearing an incorrect payee's
name. The cheque was returned but not recorded.
 a cheque issued to a supplier for Rs. 93,000 was recorded in bank book as Rs.
39,000.
 a cheque dated 20 December 2015 for Rs. 35,000 issued for repair of a car is
now time barred. The replaced cheque was issued on 25 June 2016 and
recorded, however the reversal of time barred cheque was not recorded.
Both cheques are included in outstanding cheques.
(ii) Un-cleared cheques amount to Rs. 6,460,000 and include:
 a cheque of Rs. 375,600 received from a customer was returned by the bank
marked NSF.
 a cheque of Rs. 94,080 received from a customer in settlement of an invoice
availing payment discount of 2%. The collection was recorded by EG at gross
amount of invoice.
(iii) An unidentified credit of Rs. 150,000 was appearing in the bank statement. It was found
that a customer had made an online transfer to avail 3% discount allowed on payments made by 30
June 2016.
(iv) Following debit/credit advices dated 30 June 2016 were received from the bank on
5 July 2016:
 Bank charges amounting to Rs. 16,000. It has been noted that the bank had
under charged EG by Rs. 2,730.
 Dividend collected by the bank amounting to Rs. 33,000.
 Payment on EG’s standing instruction of an annual subscription for a
magazine amounting to Rs. 11,000.
Required:
(a) Post relevant transactions to bank book of EG to arrive at the correct bank balance as at 30
June 2016. (10)
(b) Prepare a bank reconciliation statement for the month of June 2016 to arrive at the adjusted
bank balance as per EG's books. (03)

Page 12 of 32
Q.19 Test Question
Following information has been extracted from the records of Unique Traders:
Bank book for the month of February 2018
Date Receipts Rupees Date Payments Cheque Rupees
1-1 b/d 133,500
03 Salaries X09 225,000
05 Debtors 315,000 05 Utilities X10 352,000
09 Sales 525,000 08 Purchases X11 622,000
12 Rentals 615,000 15 Rental X12 608,000
18 Security deposit 200,000 20 Purchases X13 71,000
Advance from
25
customers 182,000 28 Balance 174,500
26 Debtors 294,000
28 Cash deposited in bank 55,000
2,186,000 2,186,000
Date Description Cheque Withdrawals Deposits Balance
------------ Rupees------------
01 Balance 127,500
03 Cheque withdrawal X09 225,000 (97,500)
Reversal of amount credited
05 mistakenly 48,000 (145,500)
09 Cheque withdrawal X05 63,000 (208,500)
14 Outward cheque clearing 315,000 106,500
20 Outward cheque clearing 525,000 631,500
22 Cheque withdrawal X10 325,000 306,500
24 Payment against standing instructions 15,000 291,500
25 Outward cheque clearing 615,000 906,500
26 Outward cheque clearing 200,000 1,106,500
26 Transfer (from a debtor) 38,000 1,144,500
27 Direct Debit 200,000 944,500
28 Cheque withdrawal X12 608,000 336,500
28 Cheque withdrawal X13 71,000 265,500
28 Cash deposit 55,000 320,500
28 Bank charges 4,500 316,000
1,559,500 1,748,000
(All amounts appearing in the above bank statement are correct)
Bank reconciliation statement as on 31 January 2018
Description
Balance as per bank statement 127,500
Unpresented cheques:
Cheque X05 dated 28 January 2018 (63,000)
Cheque X06 dated 31 January 2018 (150,000)
Amount mistakenly credited by bank (48,000)
Corrected balance as per cash book (133,500)

Required:
Prepare bank reconciliation statement as on 28 February 2018, showing the correct balance
as per bank book and bank statement. (08)

Q. 20 State any Ten causes of disagreement between the balance as per bank book and the bank
statement.

Page 13 of 32
Q.21 Test
On 30 June 2015, the bank book of Ranjah Enterprises (RE) reflected a credit balance of Rs. 6,900,000 whereas
the bank statement showed an overdraft of Rs. 4,830,000. On scrutinizing the record, following issues were
discovered:
(i) Cheques deposited in bank in the last week of June 2015, amounting to Rs. 3,100,000 were wrongly
credited in the bank book. Out of these, cheques amounting to Rs. 2,100,000 were cleared by the bank
in July 2015 whereas a cheque of Rs. 1,000,000 deposited on 29 June 2015 was dishonoured by the
bank.
(ii) Financial charges on bank overdraft amounting to Rs. 1,500,000 were recorded in the bank statement.
However, review by the Accounts Officer indicated an error and RE recorded the correct amount of Rs.
1,020,000 in the bank book. The error was corrected by the bank on 10 July 2015.
(iii) A cheque issued to a supplier amounting to Rs. 8,010,000 was entered in the bank book as Rs.
8,100,000. However, the bank erroneously recorded the amount as Rs. 9,000,000.
(iv) A supplier was issued a cheque of Rs. 250,000 in place of a time barred cheque on 25 June 2015 and was
cleared on the next day. However, the cancellation of time barred cheque was not recorded by RE.
(v) A payment of Rs. 100,000 through cheque was recorded twice in the bank book.
Required:
Determine the correct balance that should be reported in the bank book and prepare a statement reconciling
the corrected balance with that shown in the bank statement. (09)

Page 14 of 32
 SOLUTIONS:
A. 1
Adjusted Cash Book
Unadjusted b/d 2,250 Bank charges 15
Dividend Income 900 Electricity bill 60
c/d(adjusted) 3,075
3,150 3,150

Dr./Cr. Rs.
Balance as per adjusted cash book Cr. 6,525
Uncredited deposits:
Rao Nadir 3,400
Rauf 100
Rao Nasir 350 Cr. 3,850
Unpresented Cheques:
Surtaj 4,200
Sawan 2,000
Sarwar 1,100 Dr. 7,300
Balance as per cash book Dr. 3,075

A. 2
Bank Reconciliation Statement
Dr./Cr. Rs.
Balance as per Bank Statement Cr. 38,025
Unpresented Cheques Cr. 5,200
Uncredited cheques Dr. 6,750
Cheques wrongly Credited by Bank Dr. 400
Balance as per cash Statement Dr. 36,075

Adjusted Cash Book

Unadjusted b/d (bal) 36,150 Bank charges 75
Adjusted c/d 36,075
36,150 36,150

A. 3
Adjusted Cash Book
Unadjusted b/d 4,610 Bank charges 420
Dividend Income 380 Cheque Dishonoured 730
Cheque book 10 Trade Subscription 100
Adjusted c/d 3,750
5,000 5,000
Bank Reconciliation Statement as on 31-12-2001
Dr./Cr. Rs.
Balance as per Cash book Dr. 3,750
Unpresented Cheques Dr. 6,300
Uncredited cheques Cr. 2,500
Cheques wrongly Credited by Bank Cr. 270
Balance as per Bank Statement Cr. 7,280

A. 4
Cash book # 1 Bank Account ( Adjusted)
Dividend paid direct to the bank 400 Balance brought forword (unadjusted) 3,000
Balance carried forword (adjusted) 4,110 adjustment of under casting 700
bank charges 300
Cheque dishonoured 500
Charges 10
4,510 4,510

Page 15 of 32
 Bank Reconciliation statement
# 1 Bank Account ( Adjusted)
As at 30 June 1992

Balance as per cash book overdrawn 4,110 Cr.)

Add: Cheques not cleared 2,500 Cr.)
6,610)
Less: Unpresented Cheques 5,000 Dr.
Cheque erroneously charged to #2 Account 1,200 Dr. (6,200)
Balance as per bank pass book (Overdrawn) 410 Dr.

A.5
(A) Adjusted Cash Book
Rs. Rs.
Customer 2,000 Unadjusted Balance 6,530
Interest (100 + 50) 150
Supplier 1,000
c/d (Adjusted) 5,680
(B) Bank Reconciliation Statement
Rs.
Balance as per Adjusted Cash Book 5,680 Cr.
Un-credited Cheques 1,900 Cr.
Un-presented Cheques 2,300 Dr.
Balance as Bank Statement 5,280 Dr.
A.6 (i) Bank Reconciliation Statement
As at May 31, 2005
Balance As Per Bank Statement 870 Dr.
Un-Credited Cheques 570 Cr.
Un-Presented Cheques 630 Dr.
Cheque Wrongly Debited by Bank 82 Cr.
Balance as per Adjusted Cash Book 838 Cr.
(ii) Adjusted Cash Book
Rs. Rs.
Un-adjusted balance 322 Bank charges 143
Error in Opening 45 Cheques (98 – 89) 9
Balance (850 – 805) Receipt Recorded (230 × 2) 460
Dividend Income 1,147 Dishonoured Cheque 180
Under cast 200 Loan Interest (20,000 × 11% × 1,100
6/12)
c/d (Adjusted) 838 Lease payments (55 × 12) 660
2,552 2,552
A.7
Cash Book (Bank Book)
Amount wrongly credited 3,100,000 b/d (unadjusted) 3,450,000
(1,550+1,550)
Error in recording (4,050,000 – 45,000 Debtors 500,000
4,005,000)
Time barred cheque 125,000
Cheque recorded twice 50,000
c/d (adjusted) 630,000
Bank Reconciliation Statement as on 30.06.2015
Balance as per bank statement 2,415,000 Dr
Uncredited cheque 1,050,000 Cr
Financial charges wrongly recoded by bank [750-510] 240,000 Cr
Error in recording by bank (4,500 – 4,005) 495,000 Cr
Balance as per cash book 630,000 Cr

Page 16 of 32
A. 8

Bank Reconciliation statement

Balance as per bank Statement 204,000 Cr.
Add:
Un-credited Deposits
Channa Exports 16,500
16,500 Cr.
Less:
Un-presented Deposits
Roohi Exports 30,000
Hina Imports 7,500
JB & Co. 7,500
Flash & Company 6,000
51,000 Dr.
Balance as per Cash book 169,500 Dr.
Adjusted Cash book
Unadjusted b/d 97,500 Bank Charges 3,000

Profit on COI 75,000

c/d (adjusted) 169,500
172,500 172,500
A. 9

Adjusted Cash book

Bank Reconciliation Divided 4,000 b/d(unadjusted) 30,000 Statement
As on 30 June 2013 Creditor 7,000
Bank charges 3,000
Debtor 5,000
c/d 41,100 Cheque book 100
45,100 45,100
Balance as per cash book Cr. 41,100
Unpresented Cheques Dr. 50,000
Uncredited Cheques Cr. 25,000
Cheques not debited by bank Dr. 12,000
Balance as per bank statement Dr. 4,100

A. 10
Adjusted Bank Account
Feb Rupees Feb Rupees
28 Balance 11,753 28 Zubair Merchants 99
(12,221-12,122)
28 Correction in Cheque 184 1,800 28 Correction in Cheque 188 (4,588- 900
5,488)
28 Correction in Cheque 187 27 28 DD Waqas 551
28 SO – Yasir 918
28 Bank charges 459
28 Closing balance 10,653
13,580 13,580

Bank Reconciliation Statement

as on 28 February 2013
Closing balance as per Bank Statement 12,115)
Unpaid cheques:
Cheque 186 – Babar (918)
Cheque 189 – Ilyas (947)
Cheque 190 – Akbar (1,652)
Deposit not yet cleared:
Athar 2,055)
Balance as per adjusted bank account 10,653)
Page 17 of 32
A. 11 (a) Eden Garments
Bank Account
b/d (Un-adjusted) 760,000 Account payable 27,000
Accounts payable 50,000 (85,000 – 58,000)
Repair charges 4,630 Account receivable 366,000
Account receivable 354,000 Discount expense 4,000
Dividend income 50,000 (76,000 / 0.95) – 76,000
Bank charges 6,600
(7,850 – 1,250)
Subscription charges 12,000
Balance c/f 803,030
1,218,630 1,218,630

b) Bank Reconciliation statement for the month of 30 June 2016:

Balance as per bank statement 1,490,850 Dr.
Un-presented cheques ` 3,801,370 Dr.
(3,856,000 – 50,000 – 4,630)
Un-credited cheques 6,094,000 Cr.
(6,460,000 – 366,000)
Bank charges over charged by bank 1,250 Cr.
Balance as per bank book (Adjusted) 803,030 Dr.

A.12
(a)
Ahmed & Company
Bank Reconciliation Statement
As at 31 December, 2011
Rs.
Balance as per bank statement 367,500 Cr
9 Less: Cheques issued but not presented 467,200 Dr
1 Add: Amount deposited but not credited by bank 49,200 Cr
Balance as per cash book 50,500 Cr
(b)
Journal Entries Debit Credit
2 Bank charges 1,700
Bank Account 1,700
3 Debtor’s A/c 4,200
Bank account (Dishonoured cheque) 4,200
4 Subscription 1,000
Bank account 1,000
5 Bank account 10,000
Payable toMr. Mubarak 10,000
6 Bank account 49,900
Debtor’s A/c (direct deposits) 49,900
7 Lease payments 7,800
Bank account (2,600 × 3) 7,800
8 Mr. Bashir – cheque entered twice 36,400
Bank account 36,400
10 Discount allowed 500
Bank account (20,000 x 2.5 / 100) 500
11 Bank account 12,000
Dividend income 12,000
12 Bank Account 9,000
Debtors Account 9,000
No adjustments/entries for items 1 and 9.

Page 18 of 32
Not Required for extra Information
Adjusted Cash Book
Mr. Mubarak 10,000 Unadjusted balance 79,800
Debtor 49,900 Bank charges 1,700
Dividend 12,000 Debtor 4,200
Debtor 9,000 Subscription 1,000
c/d (adjusted) 50,500 Lease payments 7,800
Debtor 36,400
Discount Allowed 500
131,400 131,400

A.13
Comfort Travels:
(a) Correct bank book balance as on Feb 28. 2017
Bank Book
Unadjusted balance 2,845,390 (i) Accounts payable
(37,250 – 32,750) 4,500
(i) Accounts Payable 9,650 (ii) Accounts Receivable 35,000
(iv) Correction of carry forward 9,000 (iii) Bank charges (9,240–2,500) 6,740
(4,598,000 – 4,589,000)
(v) Correction of undercast 4,500 c/d 2,822,300

(b) Bank Reconciliation Statement as on February 28, 2017

Balance as per Bank Statement 3,258,000 Cr.
Outstanding Cheques / Unpresented Cheques:
[869,200 – 9,650] 859,550 Dr.
Cheques Deposited but under Clearance:
[456,350 – 35,000] 421,350 Cr.
Bank charges wrongly recorded by bank 2,500 Cr.
2,822,300 Dr.

Answer-14
Accounting entries
Date Particulars Debit Credit
31-Dec-2013 Bank 35,000
Account payable 35,000
(Being reversal of out-dated cheque)
31-Dec-2013 Bank 325,690
Account payable 325,690
(Post-dated cheque issued now reversed)
31-Dec-2013 Bank 190,000
Account receivable (190,000/0.95) 190,000
(To account for direct deposit into the bank and 5% discount
availed for payment within a week)

Discount allowed (200,000 x 5%) 10,000

Account receivable 10,000

31-Dec-2013 Bank charges 6,570

Bank 6,570
(To account for bank charges for December 2013)
31-Dec-2013 Suspense account 11,430
Bank 11,430
(debit side overcasted)

Note:
No entries were required for following:
 Entry in respect of incorrect recording of cheque no. 765 in bank reconciliation statement.

Page 19 of 32
(b)
Fine Works Limited
Bank reconciliation statement for the month of December 2013
Description Rupees
Balance as at 31 December 2013 as per bank statement 1,721,490 Cr
Cheques issued but not presented for payments:
Cheque No. 765 453,630 Dr
789 635,700 Dr
Customers cheques deposited in Dec. 2013 not yet credited by the bank 535,635 Cr
Corrected balance as at 31 December 2013 (635,105+35,000+325,690+190,000–6,570– 1,167,795 Dr
11,430)

Dr. Bank book Cr.

Unadjusted closing 635,105
Creditor 35,000 Bank charges 6,570
Creditor 325,690
Debtor 190,000 Amount overcasted 11,430

Adjusted closing balance (bal.) 1,167,795

Answer-15
i)
Particulars Dr. Cr.
(i) PLS Account 5,667
CD Account 5,667
(Payment from CD account wrongly recorded in PLS account now being rectified)
(ii) PLS Account 25,000
CD Account 25,000
(Amount deposited in PLS account wrongly recorded in CD account)
(iii) Salary expense 750
CD Account 750
(Expenses not recorded)
(iv) Debtor 8,563
CD Account 8,563
(Cheque dishonour)
(v) These are unpresented cheques and will be shown in BRS.
(vi) CD Account 25,000
PLS Account 25,000
(Transfer from PLS account to CD account not recorded)
(vi) CD Account 15,600
Payable for furniture-Best furnishers 15,600
(Issued cheque reversed)

ii)
Dr. Cash book (CD account) – adjusted Cr.
Unadjusted closing balance 6,594
PLS Account 25,000 PLS Account 5,667
Payable for furniture-Best furnishers 15,600 PLS Account 25,000
Other expenses 750
Debtor 8,563
Adjusted closing balance (bal.) 7,214
47,194 47,194

Page 20 of 32
Dr. Cash book (PLS account) – adjusted Cr.
Unadjusted closing balance 236,253
CD Account 5,667 CD account 25,000
CD Account 25,000
Adjusted closing balance (bal.) 241,920
266,920 266,920
iii)
Ex. Zed and Co.
Bank Reconciliation Statement Current Account
CD account
Balance as per bank statement 11,503Dr
(a) (v) Unpresented cheques (8,993 + 5,445 + 11,633) 26,071Dr
(b) (i) Profit on PLS credited to CD account (wrongly credited bybank) 11,577Dr
(b) (ii) Miscellaneous charges (bank omitted to debit us) 335Dr
(b) (iii) Remittance (bank omitted to credit us) 33,500Cr
(b) (iv) Uncredited cheques 23,200Cr
Balance as per adjusted cash book 7,214Dr

Ex. Zed and Co.

Bank Reconciliation Statement - PLS Account
PLS account
Balance as per bank statement Dr./(Cr.) 263,508Cr
(b) (i) Profit on PLS credited to CD account (bank omitted to credit us)
(b) (ii) Miscellaneous charges (wrongly debited by bank) 11,577Cr
(b) (iii) Remittance wrongly credited by bank 3,35Cr
Balance as per adjusted cash book Cr./(Dr.) 33,500Dr
241,920Dr

Answer-16
Dr. Bank book Cr.
Unadjusted closing (O/D) 730,718
Debtor - Credit transfer 65,600 Bank charges 1,700
(49,900+15,700) Debtor (Out of date cheque) 4,200
Interest payable 16,718 Annual subscription expense 1,000
Managing director 10,000 Rent expense (hire purchase) 7,800
(2,600 x 3 months)
Suspense (Amount debited twice) 36,400
Discount allowed exp. (20,000 x 2.5%) 500
Adjusted closing balance (bal.) 690,000
782,318 782,318

AB Traders
Bank Reconciliation Statement
Rupees
Balance as per bank statement 272,000 Dr
Add: Unpresented cheques 467,200 Dr

Less: Uncredited cheques 49,200 Cr

Balance as per adjusted bank book 690,000 Cr

Page 21 of 32
A. 17
Bank Reconciliation Statement
Balance as per bank Statement 806,436 Dr.
Unpresented Cheques (377,784-5,000) 372,784 Dr.
Uncredited Cheques 250,600 Cr.
Uncredited Bills 196,500 Cr.
Cheque wrongly credited in bank statement (13,200 X 2) 26,400 Dr.
Balance as per Cash book 758,520 Cr.
Adjusted balance of cash book will appear in the statement of financial position of the business. Therefore
758,520 will appear in liabilities of business as a bank overdraft.

Cash book( Adjusted )

Markup 118,686 b/d (unadjusted) (bal) 771,062
Cheque entered twice 5,000 Subscription 3,144
Discount allowed 10,500
Cheque wrongly credited 15,000 Plant(125,000-12,500) 112,500
c/d (adjusted) 758,520
897,206 897,206

Ans. 18
(a)
Adjusted cash book
Un-adjusted balance 800,000 Creditor 54,000
Creditor 50,000 (93,000 – 39,000)
Creditor 35,000 Debtor 375,600
Debtor 150,000 Debtor 1,920
Dividend Income 33,000 (94,080/98) x 100
Bank Charges 18,730
(16,000 + 2,730)
Subscription charges 11,000

c/f 606,750

1,068,000 1,068,000

(b)
Eden Garments
Bank Reconciliation Statement
For the month of 30 June 2016

Balance as per cash book 606,750 (Dr)

Un-presented cheques: 3,771,000 (Dr)
(3,856,000-50,000-35,000)
Un-credited cheques: 6,084,400 (Cr)
(6,460,000-375,600)
Bank charges less debited 2,730 (Dr)
Balance as per bank statement 1,703,920 (Dr)

Page 22 of 32
 A. 19 Unique Traders
Bank Reconciliation Statement
As on 28 February 2018

Balance as per bank statement 316,000 (Cr)

Un-presented Cheques:
Cheque X06 150,000
Purchases X11 622,000 772,000 (Dr)

Un-credited Cheques:

Advance from customers 182,000

Debtors 294,000 476,000 (Cr)

Balance as per adjusted bank book 20,000 (Dr)

Adjusted Bank Book

(Un-adj.) b/d 174,500 Standing Order 15,000
Expense 27,000 Creditor 200,000
overstated Bank charges 4,500
Direct deposit 38,000 c/d 20,000

239,500 239,500

A.20 Possible causes of disagreements between the bank balance shown in the bank statement and the bank
book balance include:
(i) Cheque deposited but not cleared
(ii) Un-presented cheques
(iii) Bank charges/interest
(iv) Posting errors
(v) Casting errors
(vi) Direct credit
(vii) E-payment (Direct debits)
(viii) Automated teller machine (ATM) withdrawal
(ix) Standing order
(x) Credit/Debit transfer

Ans. 21
Cash Book (Bank Book)
Amount wrongly credited 6,200,000 b/d (unadjusted) 6,900,000
(3,100+3,100)
Error in recording (8,100,000 – 90,000 Debtors 1,000,000
8,010,000)
Time barred cheque 250,000
Cheque recorded twice 100,000
c/d (adjusted) 1,260,000

Bank Reconciliation Statement as on 30.06.2015

Balance as per bank statement 4,830,000 Dr
Uncredited cheque 2,100,000 Cr
Financial charges over recorded 480,000 Cr
Error in recording by bank (900,000 – 8,010,000) 990,000 Cr
Balance as per cash book 1,260000 Cr

Page 23 of 32
 Bank reconciliation statement (BRS) summary
Purpose of BRS is to ensure that the balance in cash book (Bank column) and balance as per Bank statement
agree with each other.
Deposit Account Overdraft Account (Unfavorable
(favorable for the business) for the business)
Business prepares Cash Book (Bank Entity's Asset => Dr Entity's liability =>Cr
Column) or Bank A/C or Bank book
Bank prepares Bank statement or Pass Bank's Liability => Cr Bank's asset =>Dr
book
Possible reasons of difference among the two balances:
1. Those need adjustment in cash book (Adjusting item)

a) Items in bank statement but not in cash book

Effect In Cash Book/Bank Column
• Credit transfer Dr
• Direct debit Cr
• Standing order issued* Cr
• Bank charges Cr
• Interest on Overdrawn balance Cr
• Deposited cheque returned dishonored Cr
• interest on favorable balance (collection) Dr

*Instructions to bank to make specified payments at specified fixed dates.

b) Mistake in cash book:
• Receipt side mistakenly overstated Cr
• Receipt side mistakenly understated Dr
• Payment side mistakenly Overstated Dr
• Payment side mistakenly understated Cr

2. Those need to be presented in bank reconciliation statement (Reconciling Items)

a) Items in cash book but not in bank Statement
-A cheque from customer recorded in cash book and deposited but not yet collected by the bank (Un-
collected cheques) => Credited in BRS.
-A cheque paid to suppliers recorded in cash book but not yet presented to the bank for (payment (Un
presented cheques) Debited in BRS
b) Mistakes committed in bank Statement
 Wrongly debited/charged by the bank Credited in BRS
 Wrongly credited by the bank Debited in BRS
Points to remember
1. Balance to be shown in statement of financial positions (balance sheet) would always be the balance as per
adjusted cash Book.
2. Uncollected cheques are also named as uncredited cheques, unclear lodgments, deposits in transit.
3. Unrepresented cheques are also named as outstanding cheques, unpaid cheques.
4. When both balances are given prepare bank reconciliation statement starting with balance as per bank
statement
5. When only the balance as per cash book is given first prepare adjusted cash book and then prepare BRS
starting with the balance as per adjusted cash book.
6. When only the balance as per bank statement is given firstly prepare BRS to find out the balance as per
adjusted cash book then put this balance in adjusted cash book as a closing balance and then find out the
opening balance( balance before adjustment) that would be a balancing figure (If required in question)

Page 24 of 32
 PRACTICE QUESTIONS
Question - 1 (balance as per bank statement is not available)
The following is summary of a cash book as presented by George Ltd for the month of October:
Rs. Rs.
Receipts 1,469 Balance b/d 761
Balance c/d 554 Payments 1,262
2,023 2,023
All receipts are banked and all payments are made by cheque.
On investigation you discover:
(1) Bank charges of Rs.136 entered on the bank statement have not been entered in the cash book.
(2) Cheques drawn amounting to Rs.267 had not been presented to the bank for payment.
(3) Cheques received totaling Rs.762 had been entered in the cash book and paid into the bank, but had not
been credited by the bank until 3 November.
(4) A cheque for Rs.22 for sundry expenses had been entered in the cash book as a receipt instead of as a
payment.
(5) A cheque received from K Jones for Rs.80 had been returned by the bank and marked ‘No funds
available’(means cheque is dishonored). No adjustment has been made in the cash book.
(6) A standing order for a business rates installment of Rs.150 on 30 October had not been entered in the cash
book.
(7) All dividends received are credited directly to the bank account. During October amounts totaling Rs.62
were credited by the bank but no entries were made in the cash book.
(8) A cheque drawn for Rs.66 for stationery had been incorrectly entered in the cash book as Rs.60.
(9) The balance brought forward in the cash book should have been Rs.711, not Rs.761.
Required
(a) Show the adjustments required in the cash book.
(b) Prepare a bank reconciliation statement as at 31 October.

Question -2 (balance as per bank statement is available)

The Bank account for Alpine Sports Co. on April 1, 2006 indicated a balance of Rs. 16,911.95. During April, the
total deposits were Rs. 65,500.4 and cheques written totaled Rs. 68,127.47.
The bank statement indicated a balance of Rs. 18,880.45 on April 30, 2006.
Comparing the bank statement, the cancelled cheques and the accompanying memorandum with the records
revealed the following reconciling items:
a. Cheques outstanding totaled Rs. 5,180.27
b. A deposit of Rs. 3,481.7 representing receipts of April 30, had been made too late to appear on the
bank statement.
c. A cheque for Rs. 620 had been incorrectly charged by the bank as Rs. 260
d. A cheque for payment to Bray & Son has been recorded by Alpine Sports Co. as Rs. 497.3 instead of Rs.
479.3.
e. The bank statement showed direct transfer from debtors of Rs. 3,200 and interest income of Rs.224.
f. Bank service charges for April amounted to Rs. 25
g. A cheque for Rs. 880 from Shuler Co. was returned by the bank because of insufficient funds (means
cheque is dishonored).
Instructions:
1. Prepare bank reconciliation as of April 30
2. Journalize the necessary entries.
Note: if accounting entries are required in a question of BRS then prepare entries of items appearing in cash
book only.

Question - 3 (balance as per bank statement is not available)

st
On 31 December 1998, The Cash Book of XYZ showed a debit balance of Rs. 850. On comparing the Cash Book
with the bank statement, the following discrepancies were noted:
a) Cheques issued for Rs. 600 were not presented at the bank by Dec. 31, 1998
b) Cheques for Rs. 800 were deposited in the bank but were not cleared.
c) The bank collected direct from debtor Rs. 2,000 but no entry was made in cash book.
d) A cheque for Rs. 100 received from X & Co. and deposited in the bank was dishonoured.
e) The bank settled a Bill Payable amounting to Rs. 450, but it has not been entered in the cash book.
f) A cheque of Rs. 800 was dishonoured.
g) A cheque of Rs. 510 was paid into bank but bank credited the amount by Rs. 501 by mistake.
h) A cheque of Rs. 50 was deposited into bank but the same was credited by bank to a wrong account.
i) Rs. 200 was deposited into bank directly by a customer not recorded in cash book.
j) The bank received directly interest of Rs. 250 on investment not recorded in cash book..
Page 25 of 32
k) A cheque of Rs. 150 received from a customer and deposited in the bank was not entered in the cash book.
l) The bank paid Rs. 125 towards insurance premium through a standing order.
m) The bank charged Rs. 9 as their commission for collecting outstation cheques and allowed (credited)
interest Rs. 10 on our balance.
Required:
 Prepare a bank reconciliation statement as on December 31, 1998.
 Prepare an adjusted cash book

Question -4 (balance asper bank statement is not available)

You are Chief Accountant at Ashraf Chemicals. Bank Reconciliation Statement of Ashraf Chemicals has not
been prepared yet. Read the information given below and answer the questions at end:
1. Interest on deposits Rs. 2,500 was credited by bank and Dividend of Rs. 1,500 from Standard Paints
Limited was directly collected by bank on behalf of Ashraf Chemicals on March 31, 2008.
2. One of bank's customer Mr. Musharaf deposited Rs. 10,000 but bank credited the amount in Ashraf
Chemical's account instead of in Musharaf's account.
3. Bank paid annual Insurance payment of Rs. 1,500 to Premier Insurance Company as per our standing
instructions but we did not record it in our books.
4. Mr. Bilal (one of our customer) had given us a cheque of Rs. 5,000 which was returned by bank on
March 31, 2008 marked NSF (means not sufficient funds).
5. On March 25, Mr. Akmal (one of our customer) gave us two cheques which Mr. Ashraf deposited into
bank on March 28, 2008. First cheque for Rs. 3,000 was collected by bank on March 30, 2008 and
second cheque of Rs. 2,500 was encashed on April 4, 2008.
6. Bank deducted Rs. 50 as service charges and Rs. 200 as markup on overdraft facility.
7. Mr. Naeem was a newly hired cashier. He told you following facts:
a) While casting, he overcasted debit side of cash book by Rs. 500 and credit side of cash book by Rs.
350.
b) A cheque for Rs. 18,000 was issued to employees for their salary but he recorded Rs. 1,800 in cash
book in this regard.
c) Ashraf Chemical received a cheque for Rs. 3,600 which was cleared by bank correctly for Rs. 3,600
but he credited Cash Book by Rs. 360.
8. Cheques for Rs. 50,000 were issued by Ashraf Chemicals in the month of March 2008 out of which
Cheques for only Rs. 45,500 were encashed by suppliers upto March 31, 2008.
9. A customer directly paid into bank Rs. 20,000 on March 28 and informed Ashraf Chemicals on April 2,
2008.
10. The bank statement also contained a debit of Rs. 3,500 which bank manager admitted was an error on
its part and he promised that this mistake will be corrected next month.
Required: If balance as on March 31, 2008 is Rs. 15,000 (Dr.) as per cash book, then prepare a Bank
Reconciliation Statement and tell what would be the balance as per bank statement.

Question -5 (balance asper bank statement is available)

Mr. A operated on two separate banking accounts, described as No. 1 and No. 2.
At December 31st 1990, the balances at bank, per bank sheets (means bank statement), were No.1 Rs. 809 and
No. 2 Rs. 2,013. The bank balances in A’s books at the same date were debit balances against the bank No. 1 Rs.
85 and No. 2 Rs. 3,094.
The differences arose by reason of the followings:
1. Cheques lodged (deposited) but not yet credited, Rs. 200 and Rs. 140 for No. 1 and No. 2 respectively.
2. Cheque Rs. 20 paid into No. 2 dishonored, the entry therefore not having been made in A's books.
3. A cheque from D & Co. Rs. 22 remitted (transferred) direct to No. 1 not entered in A's books.
4. Cheque paid out for Rs. 73 from No. 2 account was wrongly entered in our books in account No. 1.
5. Cheque of Rs. 32 drawn on No. 2 inadvertently entered in the cash book as no. 1
6. A transfer of Rs. 1,000 out of No. 2 into No. 1 is not recorded in our books.
7. A periodic payment of Rs. 10 under standing orders for No. 2 not entered in cash book.
8. A cheque drawn on No. 2 entered in correct account in the cash book but as Rs. 12 instead of the correct
amount of Rs. 21
9. Bank charges of Rs. 3 and Rs. 4 for No. 1 and No. 2 respectively not entered in Cash book.
10. Cheque received Rs. 200 for No. 2 paid into No. 2 incorrectly entered in the cash book as No. 1
11. Cheque received and paid in to correct account No. 2 Rs. 18 entered as Rs. 17
12. There are no unpresented cheques except Rs. 6 no. 2 account.
Required:
 Prepare bank reconciliation statements for both of the accounts.
 Prepare adjusted cash book

Page 26 of 32
Question - 6 (balance asper bank statement is not available)
Perfect Private limited has two accounts with Ever bank Limited. The accounts were known as "Account 1" and
"Account 2".
As at March 31,1990, the Accounts books reflected the following :-
Account 1- Rs. 125,000 (Dr.)
Account 2 - Rs.111,250 (Cr.)
The Accountant failed to tally the balance with the bank statement and the following information was
available-
1. The Bank has charged interest on account 2, Rs.11,375 and credited interest in account 1 , Rs.1,250.
These were not recorded by the Accountant.
2. Rs. 12,500 drawn on March 10, 1990 from Account 1 was recorded in the books in Account 2
3. Bank charges of Rs.150 and Rs. 1,125 for Account 1and Account 2 were not recorded in the books.
4. A deposit of Rs.17,500 in Account 1 was wrongly entered in account 2 in the books.
5. Two cheques of Rs.12,500 and Rs.13,750 deposited in account 1, but entered in Account 2 in the
books, were dishonored. The entries for dishonored cheques were made in Account 2.
6. Cheques issued for Rs.150,000 and Rs. 15,000 respectively from Account 1 and 2 respectively were not
presented until April 5, 1990.
7. Cheques deposited Rs.125,000 and Rs.117,500 in Account 1 and 2 respectively, were credited by bank
only on April 3,1990.
Required: You are required to prepare the Bank reconciliation statement, for Account 2.

Question - 7
How will you treat following items in a Bank Reconciliation Statement, mention journal entry you will pass, if
any:
1. Cheque drawn for Rs. 300 but recorded as Rs. 3,000 by cashier.
2. Cheque drawn by business for Rs. 300 but recorded as Rs. 3,000 by banker.
3. Cheque deposited into bank for Rs. 775 but returned from bank because of insufficient fund.
4. Cheque deposited into bank for Rs. 775 but not credited by bank till month end.
5. Cheque written for Rs. 600 but not paid by bank till month end.
6. Cheque of Rs. 219 was incorrectly charged by bank Rs. 129.
7. Bank statement showed a credit transfer from debtors of Rs. 200.
8. The company's bookkeeper mistakenly recorded a deposit of Rs. 530 as Rs. 350.
9. The bank statement shows that a deposit for Rs. 2,300 was erroneously recorded by the bank as Rs.
2,330.
10. The bookkeeper wrote a cheque for Rs. 369 but erroneously wrote down Rs. 396 as the payment in
the company's records.

Question - 8 (balance as per bank statement is available)

Arsenal Recycling Center reports the following information concerning cash balances and cash transactions for
the month of September:
(i) Cash balance per bank statement as of September 30 was Rs. 20,893.25.
(ii) Two debit memoranda accompanied the bank statement: one for Rs. 10 was for service charges for
the month; the other for Rs. 64.60 was attached to an NSF cheque from Saeed Anwar.
(iii) Included with the bank statement was Rs. 69 credit memorandum for interest earned on the bank
account in September.
(iv) The paid cheques returned with the September bank statement disclosed an error in Arsenal Recycling
Center cash records. Cheque No. 851 for Rs. 77.44 for telephone expense had erroneously been listed
in the cash payments journal as Rs. 44.77.
(v) A collection charge for Rs. 26.00 (not applicable to the centre) was deducted from the account by
bank. Notice this was the bank’s error.
(vi) Cash receipts of September 30 amounting to Rs. 585.25 were mailed to the bank too late to be
included in the September bank statement.
(vii) Cheques outstanding as of September 30 were as follows; no. 860 for Rs. 151.93, no. 867 for Rs. 82.46,
and no. 869 for Rs. 123.61.
(viii) The bank account showed the following entries during September:
Bank
1998 Rs. 1998 Rs.
Sept. 1 Balance 18,341.82 Sept. 30 Month’s payments 11,598.63
30 Month’s receipts 14,441.58
Required: Bank reconciliation as at September 30, 1998

Page 27 of 32
Question - 9
Following information relates to Babar Shop for the month of June:
Balance per Bank of Punjab Statement at June 30 15,023.05
Outstanding cheques 4,215.83
NSF cheques from customer 250.68
Deposits in transit 2,452.87
Interest income appearing in bank statement not appearing in bank account 251.32
Service charge deducted by bank not appearing in bank account 15.00
Cash balance as per Babar's records at June 30 13,274.45
Required:
1. Prepare a Bank Reconciliation Statement as on June 30.
2. Give the journal entries to record any needed adjustments to the general ledger's balance.
3. What is the net effect on net income for these adjustments?
4. If Babar Shop is going to prepare a statement of financial position as on June 30, what balance of cash
will it report?

Question - 10 (balance as per bank statement is available)

Yaqoob Company developed the following reconciling information in preparing its September bank
reconciliation:
Balance as per bank statement , Sep 30 11,000
Credit transfers from debtors appearing in bank statement
not recorded in cash book 4,000
Outstanding cheques 6,000
Deposits-in-transit 3,000
Bank service charge 50
NSF check 800
Required: Determine the cash balance per books (unadjusted) for Yaqoob Company.

Solutions

Answer -1
Dr. Cash Book – adjusted Cr.
Unadjusted closing balance 554
Dividend income 62 Bank charges 136
Payment recorded on wrong side 44
(22x2)

Brought forward excess recorded 50 K J (Dishonor cheque) 80

(761-711) Business rate expense 150
Stationery expense less recorded 6
(66-60)
Adjusted closing balance (bal.) 858

Bank Reconciliation Statement

Balance as per adjusted cash book (overdraft) 858 Cr
Add: Unpresented cheques 267 Dr
Less: Uncredited cheques 762 Cr
Balance as per bank statement (overdraft) 1,353 Dr

Answer-2
1) Alpine Sports Co.
Dr. Cash book – Adjusted
Cr.
b/d 16,911.95
Deposits 65,500.40 Cheques written 68,127.47
c/d 14,284.88
Unadjusted closing balance 14,284.88
B & Son (497.3-479.3) 18.00 Bank charges 25.00
Debtors 3,200.00 S Co. - Debtor 880.00
Interest income 224.00
Adjusted closing balance (bal.) 16,821.88

Page 28 of 32
 Alpine Sports Co.
Bank Reconciliation Statement
Balance as per bank statement 18,880.45 Cr
Add: Unpresented cheques 5,180.27 Dr
Our account less debited by the bank (620-260) 360.00 Dr

Less: Uncredited cheques 3,481.70 Cr

Balance as per cash book 16821.88 Dr

2)
Particulars Dr. Cr.
d) Bank 18.00
Creditor Bray & Co. 18.00
e) Bank 3,200.00
Debtor 3,200.00
Bank 224.00
Interest income 224.00
f) Bank charges 25.00
Bank Account 25.00
g) S & Co. 880.00
Bank Account 880.00

Answer- 3
Mr. XYZ
Dr. Cash book – adjusted
Cr.
Unadjusted closing balance 850
Debtor c 2,000 X & Co. d 100
Debtor i 200 Bill Payable e 450
Interest on investment j 250 Debtor f 800
Debtor k 150 Insurance expense l 125
Interest on bank acc. m 10 Commission charges m 9

Adjusted closing balance (bal.) 1,976

Mr. XYZ
Bank reconciliation Statement
Balance as per adjusted cash book 1,976 Dr
Add: Unpresented cheques 600 Dr
Less: Uncredited cheques 800
Less credited by bank (510-501) 9
Bank omitted to credit our account 50
859 Cr
Balance as per bank statement 1,717 Cr

Answer- 4
Ashraf Chemicals
Dr. Cash book – adjusted
Cr.
Unadjusted closing balance 15,000
Interest income 1 2,500 Insurance expense 3 1,500
Dividend income 1 1,500 Mr. Bilal – Debtor 4 5,000
Suspense - overcasted 7a 350 Bank Charges (200+50) 6 250
Suspense (3,600+360) 7c 3,960 Suspense- overcasted 7a 500
Debtors 9 20,000 Suspense (18,000-1,800) 7b 16,200
Adjusted closing balance (bal.) 19,860

Page 29 of 32
 Ashraf Chemicals
Bank Reconciliation Statement
Balance as per adjusted cash book 19,860 Dr
Add: Unpresented cheques 8 (50,000-45,500) 4,500
Wrong Credit by bank 2 10,000
14,500 Dr
Less: Uncredited cheques 5 2,500
Wrong debit by bank 10 3,500
6,000 Cr
Balance as per bank statement 28,360 Cr

Answer- 5
Mr. A
Dr. Bank account 1 – adjusted
Cr.
Unadjusted closing balance 85
D & Co. 22 Bank charges 3
Bank account -2 73 Bank account-2 200
Bank account -2 32
Bank account -2 1,000
Adjusted closing balance (bal.) 1,009
Mr. A
Dr. Bank account 2 – adjusted
Cr.
Unadjusted closing balance 3,094
Debtor 20
Bank account-1 200 Bank account-1 73
Suspense (18-17) 1 Bank account-1 32
Standing order payment 10
Bank account-1 1,000
Suspense (21-12) 9
Bank charges 4
Adjusted closing balance (bal.) 2,147
Mr. A
Bank reconciliation Statement - Bank account 1
Balance as per bank statement 809 Cr
Add: Unpresented cheques -
Less: Uncredited cheques 200 Cr
Balance as per adjusted cash book 1,009Dr
Mr. A
Bank reconciliation Statement – Bank account 2
Balance as per bank statement 2,013 Cr
Add: Unpresented cheques 6 Dr
Less: Uncredited cheques 140 Cr
Balance as per adjusted cash book 2,147 Dr

Answer- 6
Perfect Private Limited
Dr. Cash book – adjusted (Account-2) Cr.
Unadjusted closing balance 111,250
Bank account-1 12,500 Interest charges 11,375
Bank Charges 1,125
Bank account-1 17,500

Adjusted closing balance (bal.) 128,750

The transaction no. 5 does not relate to account no. 2. However as recording and dishonour both are recorded
in this account so the effect of error is automatically eliminated.

Perfect Private Limited

Bank reconciliation Statement – Account 2
Balance as per adjusted cash book (128,750)
Add: Unpresented cheques 15,000
Less: Uncredited cheques (117,500)
Balance as per bank statement (231,250
Page 30 of 32
Answer- 7
Dr. Cr.
1. Bank Account 2,700
Creditor Account 2,700
2. Bank has given us a wrong debit by Rs. 2,700 so Rs. 2,700 will be shown as
credit item in BRS.
3. Debtors 775
Bank 775
4. Rs. 775 will be shown as credit item in BRS as Uncredited cheques
5. Rs. 600 will be shown as debit item in BRS as Unpresented cheques
6. This is an error on part of bank so it will be shown in BRS as debit item by Rs.
90.
7. Bank 200
Debtors 200
8. Bank (530-350) 180
Debtors 180
9. This is wrong credit by Bank so Rs. 30 will be shown as debit item in BRS.
10. Bank 27
Creditor 27

Answer- 8
Arsenal Recycling Center
Dr. Cash book – unadjusted Cr.
b/d 18,341.82 Payments 11,598.63
Receipts 14,441.58 Unadjusted closing balance 21,184.77

Dr. Arsenal Recycling Center Cr.

Cash book – adjusted
Unadjusted closing balance 21,184.77 Service charges 10.00
Interest Income 69.00 Saeed Anwar 64.60
Telephone expense (less recorded) 32.67
Adjusted closing balance (bal.) 21,146.50

Arsenal Recycling Center

Bank Reconciliation Statement

Balance as per bank statement 20,893.25 Cr

Add: Unpresented cheques
860 151.93
867 82.46
869 123.61 358.00 Dr
Less: Deposit-in-transit 585.25 Cr
Less: Collection charges wrongly debited by bank 26.00 Cr
Balance as per adjusted cash book 21,146.5 Dr

Answer- 9
1)
Babar Shop
Dr. Cash book – adjusted
Cr.
Unadjusted closing balance 13,274.45
Interest income 251.32 Bank Charges 15.00
Debtors (NSF) 250.68
Adjusted closing balance (bal.) 13,260.09

Babar Shop
Bank Reconciliation Statement
Balance as per bank statement 15,023.05Cr
Add: Unpresented cheques 4,215.83Dr
Less: Uncredited cheques 2,452.87Cr
Balance as per adjusted cash book 13,260.09Dr

Page 31 of 32
2)
Particulars Dr. Cr.
Bank Account 251.32
Interest Income 251.32
Bank Charges 15.00
Bank Account 15.00
Debtors 250.68
Bank Account 250.68

3) Profit will increase by Rs. 251.32 in respect of interest income and will decrease by Rs. 15 in respect of
bank charges.
4) Rs. 13,260.09 will be shown in balance sheet.

Answer- 10
Yaqoob Company
Dr. Cash book – adjusted
Cr.
Unadjusted closing balance (bal.) 4,850
Debtor (Credit transfer) 4,000 Bank Charges 50
Debtors (NSF) 800
Adjusted closing balance (W-1) 8,000
(W-1)
Yaqoob Company
Bank Reconciliation Statement
Balance as per bank statement 11,000Cr
Add: Unpresented cheques 6,000Dr
Less: Uncredited cheques 3,000Cr
Balance as per adjusted cash book 8,000Dr

Page 32 of 32