What is Cash Book and Pass Book?This page contains solutions to numerical questions on favourable balance of cash book and passbook for the chapter 5 Bank Reconciliation Statement. Favourable balance of cash book and passbook — Numerical Questions Solutions. From the following particulars, prepare a, bank reconciliation statement as at March 31, Prepare a bank reconciliation statement. The cash book shows a bank balance of Rs.
Difference Between Cash book and Passbook
Pass book is one which is issued by the bank. Recording of all cash transactions in a Book by Casher is called "Cash Book" and coming to Pass Book, Recording of all bank transactions by a banker in a book, which is given by banker is called "Pass Book". Cash book mean who are taken cash from the customer then give articles etc. Pass book mean we are given to banker who taken from our customers, etc. Cash Book is Maintain in the office which is contains all the transaction in cash or with 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.
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? Ans : The bank will debit the amount of interest to our account, and thus our bank balance will decrease as per the passbook or the amount of loan or overdraft will increase. Name four items that are written in the minus column while starting with debit balance of cash book.
Updated on Jun 27, - PM. Businesses maintain cash book to record both the cash as well as bank transactions. A Cashbook has a cash column which shows cash available with the business and a bank column which shows cash at bank. Bank also keeps an account for every customer in their books. An account statement is sent regularly to the customers by the bank.
There are end number of transactions occur in the normal course of business, where in receipt or payment is made in cash or cheque. To record these transactions the entity uses cash book and contains all the details of the receipts and disbursements that are recorded chronologically. Many times cash book is juxtaposed with Passbook, but there is a slight difference in the two. With the help of pass book, banks inform their customer about the status of their account. There are a few differences between cash book and pass book which are discussed in this article in detail, have a look. Basis for Comparison Cash book Passbook Meaning A book that keeps a record of cash transactions is known as cash book.