BRS Statement: Bill Discounted Dishonored Not Recorded on the Cash Book - 5,000 Balance as per Pass Book is Given

Introduction:
BRS stands for Bank Reconciliation Statement. It is a statement that reconciles the bank balance in the cash book with the balance in the passbook. It is prepared to ensure that the cash book and the passbook balance matches. If they do not match, it indicates errors or omissions in the cash book or passbook.

Explanation:
In this case, there is a discrepancy of 5,000 between the balance in the cash book and the balance in the passbook. The reason for this discrepancy is that a bill discounted was dishonored, but it was not recorded in the cash book. This means that the cash book balance is overstated by 5,000.

Bill Discounted:
Bill Discounting is a process in which a bank purchases a bill of exchange from the holder before its maturity date at a discount. When the bill is honored on its maturity date, the bank receives the full value of the bill. If the bill is dishonored, the bank has to bear the loss.

Impact on BRS:
In this case, the bill that was discounted was dishonored. This means that the bank had to bear a loss of 5,000. Since this loss was not recorded in the cash book, the cash book balance is overstated by 5,000. The correct balance should be lower by 5,000.

Conclusion:
To reconcile the cash book and the passbook, the amount of 5,000 should be deducted from the cash book balance. This will result in the cash book balance matching the passbook balance. It is important to prepare the BRS regularly to ensure that there are no errors or omissions in the cash book or passbook. This will help in detecting and correcting errors in a timely manner.

This amount is transferred plus side because here we improve pass book