Adjusted Bank Balance as per Cash Book

The adjusted bank balance as per cash book is calculated by adding or subtracting various items from the bank balance shown in the cash book. The following items need to be considered:

Overdraft as per Cash Book
Cheque Received Entered Twice
Cash Short
Bank Charges
Cheque Issued but Dishonored

Calculation

The calculation for the adjusted bank balance as per cash book is as follows:

Bank Balance as per Cash Book = Rs. 80,000
Add: Cheque Received Entered Twice = Rs. 5,000
Less: Cash Short = Rs. 500
Less: Bank Charges = Rs. 200
Less: Cheque Issued but Dishonored = Rs. 2,000

Adjusted Bank Balance as per Cash Book = Rs. 82,300

Explanation

The above calculation shows that the adjusted bank balance as per cash book is Rs. 82,300. This means that the cash book shows a higher balance than the actual bank balance due to the following reasons:

1. Cheque Received Entered Twice
This means that the same cheque has been entered twice in the cash book, leading to an inflated bank balance. To adjust for this, the amount of the cheque needs to be deducted from the bank balance.

2. Cash Short
This means that there is a shortage of cash in the bank compared to what is recorded in the cash book. To adjust for this, the amount of the cash shortage needs to be deducted from the bank balance.

3. Bank Charges
This means that the bank has charged a fee for its services, which needs to be deducted from the bank balance.

4. Cheque Issued but Dishonored
This means that a cheque issued by the company has been returned by the bank due to insufficient funds or other reasons. To adjust for this, the amount of the cheque needs to be deducted from the bank balance.

Conclusion

To ensure that the bank balance shown in the cash book is accurate, it is important to adjust for various items that can lead to discrepancies between the cash book balance and the actual bank balance. By doing so, the company can avoid making incorrect financial decisions based on inaccurate information.

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