Explain the process of preparing a bank reconciliation statement with amended cash balance.
Explain the process of preparing a bank reconciliation statement with amended cash balance.
Difference between cash book and pass book can arise due to some transactions that are recorded in pass book not being present in the cash book. This can be rectified by recording those transactions in the cash book. The balance thus obtained is called as adjusted balance or amended balance. The following steps describe this process.
1. Note bank balance as per cash book.
2: Make corrections for errors committed in the cash book.
3: Transactions present only on passbook’s credit side must be updated in debit side of cashbook
4. Transactions present only on the passbook’s debit side must be updated in credit side of cashbook
5: Calculate new cash book balance and use it to prepare a Bank Reconciliation Statement.
Difference between cash book and pass book can arise due to some transactions that are recorded in pass book not being present in the cash book. This can be rectified by recording those transactions in the cash book. The balance thus obtained is called as adjusted balance or amended balance. The following steps describe this process.
1. Note bank balance as per cash book.
2: Make corrections for errors committed in the cash book.
3: Transactions present only on passbook’s credit side must be updated in debit side of cashbook
4. Transactions present only on the passbook’s debit side must be updated in credit side of cashbook
5: Calculate new cash book balance and use it to prepare a Bank Reconciliation Statement.
