Cash book and passbook difference

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cash book and passbook difference

Reasons for Difference in Pass Book and Cash Book

Reconciling a bank account implies ensuring that the bank account balance as per the Cash Book is agreeing with the balance as per the Pass Bank book after taking into consideration all the reasons for the difference in the balance. If after taking into consideration all the reasons for the difference in balances as shown by both the books and making adjustments to the balance as shown by one of the books, we arrive at the balance as per the other book, then we assure ourselves that the balance as revealed by both the books is agreeing. The ledger account balances appearing in the Balance Sheet of an organisation would therefore be the balances of the ledger accounts balances in their books. The Bank Reconciliation Statement is an additional statement that is prepared to serve some purpose, i. The objective of preparing a BRS bank reconciliation statement is not to adjusting the figure in the balance sheet or the ledger account. In the Bank's Balance sheet, the balance in the customer account as shown by the pass book would find its way into the balance sheet.
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Published 16.12.2018

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'Cheque credited in passbook but not recorded in cash book'. What does it What is difference between bank passbook and photo passbook? 27, Views.

What are the main reasons of difference between pass book and cash book?

Ans : A bank reconciliation statement is prepared for finding out the causes for the difference between the balances of a cash book and passbook, and to reconcile their balance. Ans : Overdraft means the amount overdrawn from the bank. Ans : Minus balance indicates a financially unsound position of the firm, where the bank has paid more on our account than what we have deposited into the bank. Will the preparation of Bank Reconciliation Statement rectify the errors that have crept into the Passbook or Cash Book? What will be the effect of the interest charged by the bank if there is an overdraft balance?

There are end number of transactions occur in the normal course of business, where in receipt or payment is made in cash or cheque.
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What is done in reconciling?

Meaning and concept of Bank Reconciliation Statement A bank reconciliation statementis such a statement which is prepared to show how the Bank Balance as per Cash Book and the Bank Balance as per Pass Book use to differ each other. Generally, a modern business performs its transactions through bank. While doing so, it receives cash through bank deposits and makes the cash payments by issuing the cheques. To keep records of its transactions, the bank maintains a cash book, with bank columns. It is in fact the bank account in the books of the business. On the other hand, bank also maintains customer's account in their books. Everytime the business opens an account in the bank by depositing some amount, the bank provides it with a cheque book to provide the facility of the withdrawal or the payment of cash, and it also prepares a pass book which is used to show detailed statement of the customer's account in the bank.

Cheques received are entered in the Cash Book as soon as they are received. There may be a delay of a day or two in sending the cheques to the bank. Moreover, the bank, usually, does not credit the customer until the cheques are realized; if they are on other banks, it means delay. As soon as cheques are issued, they are entered in the Cash Book, but the bank, again, makes no entry until the cheques are actually presented for payment and are paid. This means that the bank shows a higher balance in favour of the client than what the Cash Book of the client shows. The bank often makes charges for services it renders; these are known as bank charges.

2 thoughts on “Difference Between Cash Book and Pass Book -

  1. There is a slight difference between cash book and passbook, that is cash book keeps a record of cash transactions whereas passbook is.

  2. Learning objectives of this article: What is difference between cash book and pass book? Explanation of Difference: Cash book is written by depositor and pass.

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