Hello everyone, in this session we will be learning of the exemplary wherein the balance as for a cash book is a work of balance and we will be preparing a bank reconciliation and finding the balance as per bank statement. Now, what is the overdraft balance, the order of balance is a facility which is provided by bank wherein we can or withdraw our bank account to certain extent or limit as provided by bank. So, in other words or draft facility is a short term loan which is given by the Bank since it's a loan, it will be showing a credit balance in our bank account as per books and it will be showing debit balance as burn our bank statement. So let's see an example on this. Missy my head of business of trading in paints bank balance as the cash book is one lakh 25,000 credit overdraft balance as on 31st March 2019.

Prepare bank reconciliation and find balance as per bank statement. First check of rupees 45,000 issued to Mrs. School Mal, but not presented for payment. Second check of rupees 75,000 to sutra missiles Not limited, the same is deposited in the bank but not cleared. Third Bank charges of rupees 5000 debited in bank statement but not recorded in the books of accounts for Mr. So not has deposited rupees 25,000 directly in the bank account, but it is not recorded in the books of accounts. Fifth interest received credited in bank statement will be 7000 but not recorded in the books of accounts.

Now, let's begin. So, we have been given bank balance as per cash Booker's one lakh 25,000 credit overdraft balances on 31st March 2019. So, we are preparing bank reconciliation statement as on 31st March 2019. So, violence as birth cash book overdraft One lakh 25,001st check of rupees 45,000 issued to Mrs. Coleman but not presented for the payment. So, there were some check which was issued to Mrs. Coleman, but it was not presented for the payment. Now, since there was a check which was issued, the same has been recorded in the books of account.

Now, since this is an overdraft balance or it's a liability and we have recorded the check issued, there will be increase in our order our balance as per cashbook. But since same is not present at for the payment, it does not record it in our bank statement. So, to that extent, our old route balance in the bank statement will be less. So now we are moving from cash book to your bank statement. So, We have do lead us in our bank reconciliation statement. Now, let's prepare a working note for this.

So that we understand better working note number one cash folk passbook. Now this is an overdraft balance. So, it will be credited balance as per cash book and debit balance as possible. Let's assume it as one lakh rupees, not jack issued but not present dead for the payment. So, it is on the credit side of cash both 45,000 Pass loop there is no to entry. So, one lakh $45,000 for cash boo one lakh as possible.

We are moving from cash book to pass books will be how to reduce 45,000 in bank reconciliation statement, let's write this additions will be writing it here. So less check issued but not present it for payment 45,000 Next, second check of rupees 75,000 receipts from muscles make not limited the same is deposited in the bank but not cleared. So, there was some check of 75,000 received from messages may not limited. Now since we have received the check and it's deposited in the bank, it is recorded in our cash book. So, to that extent our overdraft balance will be less in the cash book, but the same is not cleared in the bank. So, it is not recorded in our bank statement.

So to the extent of 75,000 our order balance in our banks statement will be great. Now, since we are moving from cash book to bank statement, we have to add 75,000. Now let's prepare a working note for this second cash book one lack on the credit side, one lack on the debit side. Now you have to be very careful while preparing a working node for overdraft balance the balance as the cash book will be on the credit side and balances. passbook will be on the debit side even while analyzing that particular transaction you have to keep in mind that itself overdraft balance so the impact of the transaction will be opposite to your normal balance. Now cashbook Now, this is what does the transaction the jack is deposed dead but not cleared.

So since check is deposited it will be on the debit side of cash boo, but there is no entry in the past book. So balance as the cash book is 25,000 School Bus brokers one lakh we are moving from cashbook to passbook, we had to add 75,000 in that bank reconciliation statement. Let's do this ad jag deposited but not cleared 75,003rd bank charges of rupees 5000 debited in the bank statement but not recorded in the books of accounts. Now, there are some bank charges which are debited in the bank statement. So, because of this bank charges debit there, there is an increase in our road route balance, as per your bank status. But since the same are not recorded in the books, our overdraft balance in the books will be less by 5000 as compared to your bank statement.

Now since we are moving from cash book to bank statement, we have to add bank charges debited by the bank but not recorded in the cash book. Now let's prepare a working node for this toward cash book. one lap credit one leg debit as Bob Bob's book of 5000 bank charges that debited by the bank so they are recorded in passbook no entry the cash book, so balance as for cash Booker's one lakh balance as possible gives one lakh by thousand Moving from cash book to pass both so we have to add 5000. Now let's write this in bank reconciliation statement add bank charges debited in bank statement but not recorded in cash book 5000. Next for Mr. So, not has deposited to be 25,000 directly in the bank account, but it does not record it in the books of accounts.

Now, that is Mr. So, not was deposited 25,000 directly in our bank account. Now, what has happened because of this is our overdraft balance has reduced in the bank statement by 25,000. But same is not recorded in our cash book or books of accounts. So, now, what has happened is to that extent our order balance In our cash book is great as compared to your bank statement. So in bank reconciliation statement we have to reduce this amount of 25,000.

Let's prepare a walking note for this for gas gash book possible one lakh credit passbook cash book, one leg Devatas passbook, now that is a direct deposit ban is this own map. So, in our past book we have 25,000 on the credit side there is no entry not cash book balance as for cash brokers one lakh balance as copass Lucas 75,000 we are moving from cash book to pass books we are to reduce 25,000 bank reconciliation statement Let's do this less direct deposit in bank account not recorded in the cash book 25,000 Next, fifth interest received credited in bank statement rupees 7000 but not recorded in the books of account, there is some interest which is received and it is recorded in the bank statement on the credit side. So, to that extent our order balances reduced in the bank statement, but same is not recorded in the books of account.

So, as books of accounts are ordered balances greater by 7000 as compared to bank statement. So, in bank reconciliation statement we have to reduce 7000. Now, let's prepare working mode for this. Fifth gash book fastboot one lakh credit in cash book one like debit and passbook. Now there are some interest which is credited at the passbook so the credit side of passbook 7000 balances purpose bukas 93,000 uncatchable that is no entry to balance us for cash vocals one lakh you're moving from cash book to pass books we are to reduce 7000 in our bank reconciliation statement. Let's do this interest received recorded and bank statement but not recorded in cash book 7000.

Now this was the last item for reconciliation now we'll just take a total and find out balance as per your past book or bank statement as on 31st March 2019 don't love this 80,000 Then total of the seven the 7000 we have to reduce. So, one lakh 35,000 plus 80,000 minus 77,001 lakh 28,000. Now, this is balance as per bank statement overdraft, since, we had started with overdraft balance as the cash book that was positive and the balance one lakh 28,000 is also positive. So, this balance is also overdraft as per bank statement. So, this was an example wherein we had water balance as the cash book and we had to prepare a bank reconciliation and find out balance as per bank statement.