Question

A bank reconciliation statement is a statement prepared to reconcile.

• A. Cash balance as per cash book and bank balance as per pass book
• B. Bank balance as per cash book and bank balance as per pass book
• C. Both (A) & (B)
• D. None of the above

Answer 1

The correct option is B Bank balance as per cash book and bank balance as per pass book

A bank reconciliation statement is a statement prepared by the business to reconcile the differences in balance as per bank column in the cash book and bank balances as per pass book (bank statement). The passbook is a copy of the customer's account with the bank and it is prepared by the bank. On the other hand, cash book is prepared by the business and bank column of cash book shows all those transactions of the business which are carried out through the bank account. So it is often, that there are differences between these two balances as they are prepared by different entities with different viewpoints which is why bank reconciliation statement is required to Reconcile these differences.