Bank Reconciliation Statement

Bank Reconciliation Statement is a statement prepared to reconcile the balance as per the bank passbook with the balance as per the cash book. It helps in identifying the differences and correcting any errors that may exist between the two balances.

Fundamentals of Accounting

Accounting is the process of recording, summarizing, analyzing, and reporting financial transactions of a business. It involves the preparation of financial statements such as the balance sheet, income statement, and cash flow statement. Fundamentals of accounting include principles, concepts, and standards that guide the preparation of financial information.

Explanation of the Scenario

- The balance as per the passbook is Rs. 20,000.
- A customer directly deposited Rs. 4,000 into the bank.
- The balance as per the cash book is Rs. 24,000.
- The adjusted balance as per the cash book is Rs. 18,000 (Rs. 24,000 - Rs. 4,000).
- The adjusted balance as per the passbook is Rs. 22,000 (Rs. 20,000 + Rs. 2,000).

Bank Reconciliation Process

1. Start with the balance as per the passbook.
2. Add any deposits in transit (amount deposited by the customer directly).
3. Deduct any outstanding checks (amount recorded in the cash book but not yet cleared by the bank).
4. Compare the adjusted balance as per the passbook with the balance as per the cash book.
5. Identify and resolve any differences between the two balances.

By following the bank reconciliation process, the accountant can ensure that both the bank and cash balances are accurately reported in the financial statements. This process helps in detecting errors, fraud, and ensuring the accuracy of financial records.

Ans:16000
20000-4000=16000