Financial Accounting 1 Lecture – 22 Reasons for Difference Between Bank Book and Bank Statement Receipts are recorded by us on the date of receipt of cheque, whereas bank records the transaction at actual time of receipt. Payments are recorded at the time of issuing the cheque, whereas the bank records the payment at time of actual payment. Bank charges deducted by bank that come to our knowledge when we receive the bank statement. Payments made directly by the bank on our standing instructions. Moneys paid in directly by our dealers or custonmers.

Financial Accounting 2 Lecture – 22 Example Bank Book (Bank Account Number) Date 20-- Vr. # Chq. No. Narration / Particulars Ledger Code Receipt Amount Payment Amount Balance Dr/(Cr) Jul 01Opening Balance150,000 Jul Paid to XYZ20,000130,000 Jul 10Cash Deposit in Bank5,000135,000 Jul Paid to ABC25,000110,000 Jul Paid to creditors50,00060,000

Financial Accounting 3 Lecture – 22 Tracing Figures From Bank Book to Bank Statement Bank Statement Account No Date 20-- Narration / Particulars Withdrawals Amount Deposits Amount Balance Jul 01Opening Balance150,000 Jul 05Chq # ,000130,000 Jul 10Cash Deposit in Bank5,000135,000 Jul 15Chq # ,000110,000 Jul 20Chq # ,00060,000 Jul 31Bank charges50059,500 Jul 31Profit70060,200

Financial Accounting 4 Lecture – 22 Example Bank Statement Account No Date 20-- Narration / Particulars Withdrawals Amount Deposits Amount Balance Jul 01Opening Balance150,000 Jul 05Chq # ,000130,000 Jul 10Cash Deposit in Bank5,000135,000 Jul 15Chq # ,000110,000 Jul 20Chq # ,00060,000 Jul 31Bank charges50059,500 Jul 31Profit70060,200 NOTE this slide the same as the previous slide with the change of colours

Financial Accounting 5 Lecture – 22 Bank Reconciliation Rs. Balance as per bank book60,000 Add: Profit given by bank 700 Less:Charges by bank (500) Balance as per bank statement60,200

Financial Accounting 6 Lecture – 22 A payment of Rs. 10,000 is made on 31 Jul, and it appears in our bank statement on Aug, 02. Now the balance as per our bank book is Rs 50,000, and our bank statement is still showing Rs. 60,200

Financial Accounting 7 Lecture – 22 Example Bank Book (Bank Account Number) Date 20-- Vr. # Chq. No. Narration / Particulars Ledger Code Receipt Amount Payment Amount Balance Dr/(Cr) Jul 01Opening Balance150,000 Jul Paid to XYZ20,000130,000 Jul 10Cash Deposit in Bank5,000135,000 Jul Paid to ABC25,000110,000 Jul Paid to creditors50,00060,000 Jul Payment10,00050,000 NOTE this slide the same as #2 the change of last row

Financial Accounting 8 Lecture – 22 Bank Reconciliation Rs. Balance as per bank book50,000 Add: Profit given by bank 700 Less:Charges by bank (500) Add:Cheque issued but not presentedin bank10,000 Balance as per bank statement60,200

Financial Accounting 9 Lecture – 22 Presentation in Balance Sheet Bank book balance is shown in the balance sheet, not the bank statement balance.

Financial Accounting 10 Lecture – 22 In the same example assume a cheque of Rs. 10,000 is received on 31 Jul, and it appears in our bank statement on Aug, 02. Now the balance as per our bank book is Rs 70,000, and our bank statement is still showing Rs. 60,200

Financial Accounting 11 Lecture – 22 Example Bank Book (Bank Account Number) Date 20-- Vr. # Chq. No. Narration / Particulars Ledger Code Receipt Amount Payment Amount Balance Dr/(Cr) Jul 01Opening Balance150,000 Jul Paid to XYZ20,000130,000 Jul 10Cash Deposit in Bank5,000135,000 Jul Paid to ABC25,000110,000 Jul Paid to creditors50,00060,000 Jul 30Receiupt10,00070,000 NOTE this slide the same as #2 the change of last row

Financial Accounting 12 Lecture – 22 Bank Reconciliation Rs. Balance as per bank book70,000 Add: Profit given by bank 700 Less:Charges by bank (500) Less:Cheque received but not credited in bank (10,000) Balance as per bank statement60,200

Financial Accounting 13 Lecture – 22 Example Bank Book (Bank Account Number) Date 20-- Vr. # Chq. No. Narration / Particulars Ledger Code Receipt Amount Payment Amount Balance Dr/(Cr) Dec 01Opening Balance174,000 Dec 07Received form Anwer8,800182,800 Dec Paid to Tariq34,900147,900 Dec Paid to Shabbir3,300144,600 Dec 22Received from Javed7,300151,900 Dec Paid to Salim11,500140,400 Dec 31Received from Javed24,900165,300 Dec 31Received form Rashid17,800183,100

Financial Accounting 14 Lecture – 22 Tracing Figures From Bank Book to Bank Statement Bank Statement Account No Date 20-- Narration / Particulars Withdrawals Amount Deposits Amount Balance Dec 01Balance B/f174,000 Dec 07Deposits8,800182,800 Dec 11Chq # ,900147,900 Dec 20Chq # ,300144,600 Dec 22Deposits7,300151,900 Dec 31Charges2,200149,700

Financial Accounting 15 Lecture – 22 Example Bank Book (Bank Account Number) Date 20-- Vr. # Chq. No. Narration / Particulars Ledger Code Receipt Amount Payment Amount Balance Dr/(Cr) Dec 01Opening Balance174,000 Dec 07Received form Anwer8,800182,800 Dec Paid to Tariq34,900147,900 Dec Paid to Shabbir3,300144,600 Dec 22Received from Javed7,300151,900 Dec Paid to Salim11,500140,400 Dec 31Received from Javed24,900165,300 Dec 31Received form Rashid17,800183,100

Financial Accounting 16 Lecture – 22 Tracing Figures From Bank Book to Bank Statement Bank Statement Account No Date 20-- Narration / Particulars Withdrawals Amount Deposits Amount Balance Dec 01Balance B/f174,000 Dec 07Deposits8,800182,800 Dec 11Chq # ,900147,900 Dec 20Chq # ,300144,600 Dec 22Deposits7,300151,900 Dec 31Charges2,200149,700

Financial Accounting 17 Lecture – 22 Example Bank Book (Bank Account Number) Date 20-- Vr. # Chq. No. Narration / Particulars Ledger Code Receipt Amount Payment Amount Balance Dr/(Cr) Dec 01Opening Balance174,000 Dec 07Received form Anwer8,800182,800 Dec Paid to Tariq34,900147,900 Dec Paid to Shabbir3,300144,600 Dec 22Received from Javed7,300151,900 Dec Paid to Salim11,500140,400 Dec 31Received from Javed24,900165,300 Dec 31Received form Rashid17,800183,100 Dec 31Charges2,200180,900

Financial Accounting 18 Lecture – 22 Bank Reconciliation Statement Balance as per bank book180,900 Add:Un-presented Cheques 11,500 Less:Un-credited Cheques (24,900) (17,800) Balance as per bank statement 149,700