State the
causes of difference occurred due to time lag.
State the
causes of difference occurred due to time lag.
The causes of difference that occur due to time lag are given below.
1. When issued cheques are not presented for payment in the period for which Bank Reconciliation Statement is being prepared, i.e., date of issue and the date of presenting the cheques are not same.
Cheques are credited in the Cash Book on the date that is mentioned on it, while in the Pass Book, cheques are debited when they are presented for the payment. Sometimes, the holder of a cheque does not present the cheque for payment on date ehich is mentioned on Cheque. The time gap between the date of issue and the date of presenting cheque for payment in the bank may lead to difference between the Cash Book and the Pass Book balances.
2. When deposited cheques are not cleared in the period for which the Bank Reconciliation Statement is being prepared.
Usually, date of deposit of cheque and date of clearance are not same as the clearance of cheque takes time. The difference between the Cash Book and the Pass Book balances arise when a cheque is deposited at the end of a period for which the Bank Reconciliation Statement is prepared and the cheque gets clearance in the subsequent period.
The causes of difference that occur due to time lag are given below.
1. When issued cheques are not presented for payment in the period for which Bank Reconciliation Statement is being prepared, i.e., date of issue and the date of presenting the cheques are not same.
Cheques are credited in the Cash Book on the date that is mentioned on it, while in the Pass Book, cheques are debited when they are presented for the payment. Sometimes, the holder of a cheque does not present the cheque for payment on date ehich is mentioned on Cheque. The time gap between the date of issue and the date of presenting cheque for payment in the bank may lead to difference between the Cash Book and the Pass Book balances.
2. When deposited cheques are not cleared in the period for which the Bank Reconciliation Statement is being prepared.
Usually, date of deposit of cheque and date of clearance are not same as the clearance of cheque takes time. The difference between the Cash Book and the Pass Book balances arise when a cheque is deposited at the end of a period for which the Bank Reconciliation Statement is prepared and the cheque gets clearance in the subsequent period.
