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Bank Reconciliation statement Jogindeer Sharma works as an accountant in Ragav International . His responsibilities are maintaining and recording the day to day transactions of the firm's and preparing the Bank Reconciliation Statement at the end of the month. The firm's cash book for July 2018 which Joginder has just finished entering and balancing for the month end is shown below.( Note : For the sake of clarity the cash column has beenomitted.) A copy of firm's bank statement from the Axis Bank Ltd. has just been received for July and is also given below. You are required toprepare corrected Cash Book and also Bank Reconciliation Statement as on 31st July, 2018. |
| Answer» <html><body><p></p>Solution :Bank Pass Book is reconciled with the Cash Book in following four <a href="https://interviewquestions.tuteehub.com/tag/steps-1227441" style="font-weight:bold;" target="_blank" title="Click to know more about STEPS">STEPS</a>. <br/> Step 1: Tick the items in both Cash Book and Bank Statement <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/TSG_ACC_XI_PW_S01_004_S01.png" width="80%"/> <br/> Step 2: Update the Cash Book from the Bank Statement <br/> The unticked item on the bank statement indicate items that have gone through the Bank Account but have not yet been recorded n Ragav International Cash Book. These are : <br/> `{:("Receipt","July 02","Refund from Whois. com","₹ 1,403"),("Receipts","July <a href="https://interviewquestions.tuteehub.com/tag/05-256274" style="font-weight:bold;" target="_blank" title="Click to know more about 05">05</a>","Refund of Unsuccess recharge from ICONNECT"," ₹ 98"),("Payment","July 28","Service Tax Charge","₹ 25"),("Payment","July 28","Other Bank Charges","₹ 200"):}` <br/> Joginder will have to record these transactions in the cash book to bring it up to date. The new entries are shown in Bold type, the previous entries are in normal type. <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/TSG_ACC_XI_PW_S01_004_S02.png" width="80%"/> <br/> The balance of he bank Column now stands at ₹ 48,508. This still differs from the bank statement balance of ₹ 36,080. <br/> The numerical <a href="https://interviewquestions.tuteehub.com/tag/difference-951394" style="font-weight:bold;" target="_blank" title="Click to know more about DIFFERENCE">DIFFERENCE</a> between the two is : <br/> Bank Statement ₹ 36,080 (Cr.) minus cash book ₹ 48,508 (Dr.)= ₹12,428(Cr.) <br/> This remaining difference is dealt with in theBank Reconciliation Statements. <br/> Step 3: Identify the remaining unticked items from the Cash Book. These are :<br/> `{:("Payments","July <a href="https://interviewquestions.tuteehub.com/tag/10-261113" style="font-weight:bold;" target="_blank" title="Click to know more about 10">10</a>","Vikash Ltd.","₹1,447",|,"Payments","July 31","Ashutosh & Co.","₹5,000"),("Payments","July 15","Raj Distributors","₹735",|,"Payments","July 31","Orpat Insturment","₹10,000"),("Payments","July 15","City Automation Pvt. Ltd.","₹3,150",|,"Payments","July 31","Perfect Stores","₹15,000"),("Payments","July 15","Vipul Tiwari","₹1,120",|,"Receipts","July 29","Ramesh & Co.","₹40,000"),("Payments","July 10","Sky Venture","₹1,120",|,"Receipts","July 31","Dhingra & Co.","₹10,000"):}` <br/> These items should appear on next month's bank statement as they are because of timing differences. The above transactions are item which will be required to be shown in the Bank Reconciliation Statement. <br/> Step 4: Preparation of the Bank Reconciliation Statement.<br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/TSG_ACC_XI_PW_S01_004_S03.png" width="80%"/></body></html> | |