Preparing BRS for a Cheque of 12000 Drawn on the Saving Deposit Account but Shown as Drawn on Current Account in Cash Book

Step 1: Understanding the Situation

In this scenario, a cheque of 12000 was drawn on the savings deposit account but mistakenly shown as drawn on the current account in the cash book. As a result, the debit balance as per cash book will be higher than the actual balance.

Step 2: Collecting Information

To prepare the bank reconciliation statement (BRS), we need to collect the following information:

- Bank statement for the corresponding period
- Cash book for the corresponding period
- Cheque book register

Step 3: Identifying Differences

We need to compare the entries in the bank statement and the cash book and identify the differences. In this case, the cheque of 12000 drawn on the saving deposit account will not appear in the bank statement as it was mistakenly shown as drawn on the current account.

Step 4: Adjusting the Cash Book Balance

To adjust the cash book balance, we need to deduct the amount of the cheque (12000) from the debit balance as per cash book. This will give us the adjusted cash book balance.

Step 5: Preparing the Bank Reconciliation Statement

We can now prepare the BRS by comparing the adjusted cash book balance with the bank statement balance. Any differences in the two balances can be explained by identifying uncleared cheques, deposits in transit, bank charges, and interest earned.

Step 6: Reconciling the Balance

Once we have identified the differences, we can reconcile the balance by adjusting the cash book and bank statement balances accordingly.

Conclusion

Preparing a BRS is essential to identify any discrepancies between the cash book and bank statement balances. In this scenario, the cheque was mistakenly shown as drawn on the current account instead of the savings deposit account, leading to an incorrect debit balance in the cash book. By following the above steps, we can adjust the cash book balance and reconcile the balance with the bank statement balance.

Dr. balance as per cashbook
MINUS : Cheque drawn on saving account recorded as cheque drawn on current account 12,000