Bank Reconciliation Statement - Problems & Solutions
Bank Reconciliation Statement
Problems & Solutions
Problem 1: Favorable Balance (Starting from Cash Book)
Problem Statement:
On December 31, 2024, the cash book of ABC Trading Company showed a favorable (debit) balance of ₹15,000. Upon comparing with the bank statement, the following discrepancies were noted:
Checks issued but not yet presented for payment: ₹2,500
Checks deposited but not yet credited by bank: ₹1,800
Bank charges debited by bank not recorded in cash book: ₹120
Interest credited by bank not recorded in cash book: ₹250
Direct deposit by customer not recorded in cash book: ₹3,000
Check dishonored by bank not recorded in cash book: ₹500
Required: Prepare a Bank Reconciliation Statement to find the balance as per bank statement.
Solution:
Bank Reconciliation Statement as on December 31, 2024
Balance as per Cash Book (Favorable - Dr.)
₹15,000.00
Add:
Checks issued but not yet presented
₹2,500.00
Interest credited by bank (not in cash book)
₹250.00
Direct deposit by customer (not in cash book)
₹3,000.00
Total Additions
₹5,750.00
Less:
Checks deposited but not yet credited by bank
₹1,800.00
Bank charges debited by bank (not in cash book)
₹120.00
Check dishonored by bank (not in cash book)
₹500.00
Total Deductions
₹2,420.00
Balance as per Bank Statement (Pass Book - Cr.)
₹18,330.00
Calculation:
Balance as per Bank Statement = ₹15,000 + (₹2,500 + ₹250 + ₹3,000) - (₹1,800 + ₹120 + ₹500)
= ₹15,000 + ₹5,750 - ₹2,420 = ₹18,330.00 (Cr. as per Bank Statement)
Problem 2: Favorable Balance (Starting from Bank Statement)
Problem Statement:
On June 30, 2024, the bank statement of XYZ Corporation showed a favorable (credit) balance of ₹22,000. The following differences were identified when comparing with the cash book:
Checks issued to suppliers but not yet presented: ₹4,200
Checks received from customers deposited but not yet cleared: ₹2,100
Bank collected dividend on behalf of company: ₹1,500 (not in cash book)
Standing order for insurance premium paid by bank: ₹800 (not in cash book)
Bank service charges: ₹150 (not in cash book)
Wrong credit by bank (error): ₹300 (needs reversal)
Required: Prepare a Bank Reconciliation Statement to find the balance as per cash book.
Solution:
Bank Reconciliation Statement as on June 30, 2024
Balance as per Bank Statement (Favorable - Cr.)
₹22,000.00
Add:
Checks deposited but not yet cleared
₹2,100.00
Standing order - insurance premium (not in cash book)
₹800.00
Bank service charges (not in cash book)
₹150.00
Total Additions
₹3,050.00
Less:
Checks issued but not yet presented
₹4,200.00
Dividend collected by bank (not in cash book)
₹1,500.00
Wrong credit by bank - reversal (error)
₹300.00
Total Deductions
₹6,000.00
Balance as per Cash Book (Dr.)
₹19,050.00
Calculation:
Balance as per Cash Book = ₹22,000 + (₹2,100 + ₹800 + ₹150) - (₹4,200 + ₹1,500 + ₹300)
= ₹22,000 + ₹3,050 - ₹6,000 = ₹19,050.00 (Dr. as per Cash Book)
Problem 3: Bank Overdraft (Starting from Cash Book)
Problem Statement:
On March 31, 2024, the cash book of DEF Enterprises showed an overdraft balance of ₹8,500. When compared with the bank statement, the following discrepancies were found:
Checks issued but not yet presented for payment: ₹3,200
Checks deposited but not yet credited by bank: ₹2,500
Bank charges for overdraft interest: ₹180 (not in cash book)
Direct payment by customer: ₹4,000 (not in cash book)
Standing order for rent payment: ₹1,200 (not in cash book)
Check returned due to insufficient funds: ₹750 (not in cash book)
Required: Prepare a Bank Reconciliation Statement to find the balance as per bank statement.
Solution:
Bank Reconciliation Statement as on March 31, 2024
Balance as per Cash Book (Overdraft - Cr.)
₹8,500.00
Add:
Checks issued but not yet presented
₹3,200.00
Direct payment by customer (not in cash book)
₹4,000.00
Total Additions
₹7,200.00
Less:
Checks deposited but not yet credited by bank
₹2,500.00
Bank charges/OD interest (not in cash book)
₹180.00
Standing order - rent payment (not in cash book)
₹1,200.00
Check returned - NSF (not in cash book)
₹750.00
Total Deductions
₹4,630.00
Balance as per Bank Statement (Overdraft - Dr.)
₹5,930.00
Calculation:
Balance as per Bank Statement = (-₹8,500) + (₹3,200 + ₹4,000) - (₹2,500 + ₹180 + ₹1,200 + ₹750)
= -₹8,500 + ₹7,200 - ₹4,630 = -₹5,930.00 (Overdraft - Dr. as per Pass Book)
Note: For overdraft, additions reduce the overdraft and deductions increase it.
Problem 4: Bank Overdraft (Starting from Bank Statement)
Problem Statement:
On September 30, 2024, the bank statement of GHI Limited showed an overdraft of ₹12,800. Comparison with the cash book revealed the following differences:
Checks drawn but not yet presented for payment: ₹5,600
Checks paid into bank but not yet cleared: ₹3,400
Interest on overdraft charged by bank: ₹320 (not in cash book)
Payment made by bank as per standing instruction: ₹900 (not in cash book)
Direct deposit by debtor into bank account: ₹2,800 (not in cash book)
Bank charges for processing: ₹95 (not in cash book)
Check deposited but dishonored: ₹1,100 (not in cash book)
Required: Prepare a Bank Reconciliation Statement to find the balance as per cash book.
Solution:
Bank Reconciliation Statement as on September 30, 2024
Balance as per Bank Statement (Overdraft - Dr.)
₹12,800.00
Add:
Checks paid in but not yet cleared
₹3,400.00
Interest on overdraft (not in cash book)
₹320.00
Standing instruction payment (not in cash book)
₹900.00
Bank charges for processing (not in cash book)
₹95.00
Check deposited but dishonored (not in cash book)
₹1,100.00
Total Additions
₹5,815.00
Less:
Checks drawn but not yet presented
₹5,600.00
Direct deposit by debtor (not in cash book)
₹2,800.00
Total Deductions
₹8,400.00
Balance as per Cash Book (Overdraft - Cr.)
₹15,385.00
Calculation:
Balance as per Cash Book = (-₹12,800) + (₹3,400 + ₹320 + ₹900 + ₹95 + ₹1,100) - (₹5,600 + ₹2,800)
= -₹12,800 + ₹5,815 - ₹8,400 = -₹15,385.00 (Overdraft - Cr. as per Cash Book)
Note: For overdraft, additions increase the overdraft and deductions reduce it when converting from Bank Statement to Cash Book.
