Hello everyone, in this session we will be seeing an example of how to prepare a bank reconciliation statement. When we are having your bank account ask for books and your bank statement. In addition to that we have bank reconciliation statement for the opening period. Let's read this example first muscle so GM limited has started a business in Jan 2019. Following other details provided, so we have bank reconciliation statement as on forced web 2019 ABC bank account for the month of 2019 bank statement from ABC bank for the month of February 90 prepare bank reconciliation statement from bank statement to cash book as on 20th 2019 from bank statement to cash book means we have to start with a balance as per bank statement and we have to derive what is the balance as per cashbook. Now, this is a bank reconciliation statement as on first 2019 then we have in the books of muscles so GM limited ABC bank account so we have ABC bank account in our books.

So, this is debit and this is credit. Then we have bank statement of ABC Bank of muscles so gum wrong first 2019 to 20th 2019 and we have a particular transaction Id check number withdrawals to pause it and back Now, let's begin and understand how to solve this example. Now, since we are given bank reconciliation statement of the opening period, we have to verify if the unreconciled items of the bank reconciliation statement of the opening period are reconciled now, that is either they are appearing in your books of accounts or your bank statement for the month of FEHB. If they are still unreconciled, then those transactions will again will be the part of your bank reconciliation statement as on 20th 2019. Now, if you see this bank reconciliation statement as on first web 2019 we have balance as per bank statement 1818 300. Now, this battery has to match with your balance as per bank statement as on first FEHB 2019 Let's check this let's go to the bank statement so bank statement of ABC bank.

So I'm first rep 2019 balance brought forward 1818 300 credit, so it matches next balance as the cash book is 21 lakh 79,000. So, let's go to this ABC bank account. This is our cash book on first web 2019 to balance brought down 21 lakh 79,000. So we have verified this balances those balances match with your bank statement and cash book respectively. Now will verify each and every transaction which is there in the bank reconciliation statement and we'll find it in the That in your cash book or either in your past book as the case may be, and if it is still not found in the past book or cash book for the month of then it will be included in the bank reconciliation statement as on 20th 2019. Let's begin check deposited but not cleared mental, Santa's limited.

This is a check number 5984722 lakh 75 500. Now, there is some check which was deposited, so it was already recorded in your cash book, but since it was not clear it was appearing in the bank reconciliation statement. Now, let's check if this check is cleared in the month of check numbers 598472 amount is two lakh 75 500. Let's go to the bank statement and find it in bank statement. Let's Check for the check number 598472. So we have a tier 5984722 lakh 75 500 Let's see the particulars missile sahana limited, so this check is cleared in the month of so let's highlight it and let's market in our reconciliation statement also conciliation statement.

Next, bank charges debited in bank but not recorded in the books of account 1200 now these bank charges were already in your bank statement. So, but they were not in your cash book. So now let's check if in the month of FEHB this bank charges are appearing in your bank account as book books. So this is a bank account asper books so in the month of bank judges, let's see on the credit, side, credit side We have an entry of 1200 bank charges on second fifth 2019. So, let's mark this this item is also reconciled, let's market in the bank reconciliation statement. Third, direct payment by bank not recorded in the books of accounts parama limited, this is a transaction number amount as one lakh 25,000.

Now, this was a direct payment by bank so it was appearing in the bank statement, but same was not recorded in the books and Amanda's one lakh 25,000. Now, let's see in the bank account. If you go to the credit side of bank account, since it's a payment you can find the amount of one lakh 25,000 in description we can see by parama limited on second FEHB 2019. So, this is also reconcile interest payment by bank not recorded in the books of accounts one lakh 87 500 there was a interest payment which was appearing in the bank statement but not recorded in the books of accounts. Now let's see the credit side of our ABC bank account. So, we have interest expense one lakh 87 500, which is recorded on second FEHB 2019.

So, this is also reconcile now next less check issued but not presented for payment, see my enterprises file and six to seven to about a 76 by hundred. Now this check was issued so it was appearing in the cash book, but it was not presented for payment. Let's see if the check is presented for the payment in the month of February. Let's say this in the bank statement. This is a bank statement. Let's see if we can find that check.

So there is no check of five and six to seven So, this still not presented for the payment. So it is spending on this five and six to seven tools still pending next direct bank transfer credited in the bank statement, but not recorded in the cash group, Mr. sukanya, one lakh 50,000. So, there was some direct amount which was received from and so sukanya one lakh 50,000, which was appearing in the bank statement but not recorded in the books, one lakh 50,000 Let's see this receipt is recorded in the month of FEHB. Let's see net debit side. So, in debit side we can find one lakh 50,000 to sukanya limited on second for 2019. So, it is reconciled.

Let's mark this next bank interest credited by bank but not recorded in the cash book 2000. So, this was in the bank statement but not in the cash book. Let's see if it is recorded in the month of FEHB. So on the debit side, we can see two interest income 2000. So let's highlight this. Now if we see the bank reconciliation statement of first 2019 only one transaction that is check issued but not presented for payments in my enterprises five and six to seven to 76 500 is unreconciled.

This will be part of our bank reconciliation statement as on 28 2019. Now let's see our bank account as the books and our bank statement and find the common transactions in both. So this is our bank account. That's Bob books, and this is a bank statement. Now let's see the the bed side of our bank account for So, we have a balance brought down 2179 then one lakh 50,002 thousand were in the bank reconciliation statement as unforced for 2019 the next 20th 2019 to PNR brothers 8974562 lakh 48 740 so this is a check which is deposited 897456 Now let's see if it is appearing in our bank statement. So if we see the bank statement, yes, we have this check number 8974562 lakh 48 740 and BNR brothers So, let's mark this.

Then next when dff 2019 two Joshi brothers 9876531 light 20 by 740 let's see if this check number is appearing in the bank statement 987653 We can't find it in the bank statement. So this transaction will be part of our bank reconciliation statement as on 20th 2019. Now let's see the credit side of bank account. So credit side 1201 a decent 501 like 25,000 votes already in the bank reconciliation statement. All first FEHB 2019. Let's see these transactions 15 for 2019 biosocial limited by 16275 to like 25,000.

So this was a check which was issued to such a limited check numbers five and six to seven try. Let's see if we can find this check number in the bank statement. Yes, we have five and six to seven five amount is two lakh 25,000. Such a limited so let's mark this. Then 20th 2019 by suhani limited five and six to seven, six. One lakh, let's see, if we can find this check number 516276 there is no checking number 516276.

So, this is check issued, but not present at one life. So, this will be part of our bank reconciliation statement. Now, let's go to the bank statement of ABC bank for the month of FEHB. So, if we see this is opening balance for step 2090, all this items are marked here, then there is one transaction 24th 2019 direct transfer by SNM limited. So, there is a credit of one lakh 55,000 but same is not appearing in your cash book. So, it will be part of bank reconciliation statement.

Then 20th 2019 there is an interest which is credited 2500 again the same as not appearing in your cash book and it will be the part of bank reconciliation statement. Now, let Number all the uncommon transactions from your opening bank reconciliation statement, your cash book and your bank statement to find out what are the items of bank reconciliation statement as on 20th 2019 Let's do that. So in bank reconciliation we have one year then in bank account we have this transaction and I'm credit side we have one transaction bank statement we have these two transactions. So despite transactions will be part of bank reconciliation statement as on 20th 2019. Let's prepare a bank reconciliation statement and working notes for the same so this is a format of bank reconciliation statement as on 20th 2019. We have to begin with the balance as per bank statement on Twitter.

Be a third 2019 Let's see that so 20th 2019 balance as per bank statement is 22 lakhs 75 040 credit let's write this balance as per bank statement normal credit balance 22 lakhs 75 040 Now let's see all the transactions one by one firsters check issued but not presenter for payments he my enterprises check numbers five and six to seven to a mountain 76 500 Let's prepare walking note for this. So we have cash and fast let's assume the balances one lakh debit as for cash Book One lakh credit as Oh passbook now there was a check which was issued and was recorded in the cash book in the last month. 72 Six by hundred, but the same is not appearing in the past. So, balance as per cashbook is 23 500 balance us but Lucas one lakh now we are moving from passport to cash boop.

So, we have to reduce 76 by hundred in our bank reconciliation statement. In other words, when the check is issued your cash balance to that that extent has reduced but since the same is not recorded in the past both the balance in the past book is great as compared to the cash boo to the extent of 76 500. Now, since we are moving from boss book to cash book we have to reduce the 76 500 and bank reconciliation statement. Let's do this. Less check issued but not presented for payment seven to six Hundred. Now the next transaction two grand dff 2019 two Joshi brothers 9876531 lakh 25 740.

So in bank account we have a jack which is received from Joshi brothers the check number is 987653 but the same is not cleared in the bank and not appearing in the bank statement. So, let's prepare a working note and analyze this transaction. Do we have cash book and passport? Let's assume the balances one lakh cashbook debit one lakh as per possible credit. Now that is a check received and deposited amounting to one lakh 25 740 but the same is not recorded in the past folks. So, no entering the past balance in the cash book becomes two lakh 20 by 740 balance in the past workers one lakh.

Now, we are moving from passbook to cash book. So, we had to add one lakh 20 by 714 the bank reconciliation statement, let's analyze this transaction in the other be now there is one check which has been received and deposited in the bank the extent of one lakh 25 740 Now, because of this your balance in the cash book has increased by one lakh 25 740 but since the same is not recorded in the past book, your balance in the past goal is less compared to cash both by one lakh 25 740 now since we are moving from passbook to cash book we have to add one lakh 25 714 bank reconciliation statement. Let's do this as Jag deposited but not cleared one lakh 25 740. Now, let's see the next transaction in bank account credit side 20th 2019 by suhani limited 5162761. Now this is check issued to suhani limited amounting to one lakh but the same is not appearing in the bank statement.

So, this is check issued but not presented one lakh rupees. Let's prepare a working note for this and analyze the transaction three we have cash book and passport balances one leg debit as for cash flow one lakh credit asper Bank book the check which is issued and recorded in the cash book, one leg there is no injury in the past. So the balance in the cash book is zero balance in the past book is one Now, we are moving from passbook to cash book. So, we have to reduce one lakh in bank reconciliation statement let's analyze this in other way. So, there is one check which is issued and recorded in the cash book because of Rachel balance in the cash flow cash revenues now seen as not recorded in the past. So, what has happened because of that as balance in the past book is greater than the cash book the extended one lakh and here we are moving from passbook to cash flow.

So, we have to reduce one lakh in bank reconciliation statement. Let's do this. Let's check issued but not present dead for payment one lakh. Now let's move on to the next transaction transaction number for direct transport SNM limited we have transaction ID one lakh 55,000. So there is a direct deposit by s&m limit dead in our bank account but same is not recorded in the cash book. Let's prepare a working note for this and then analyze it for the sport we have cacheable passport, one leg debit balances for cash boo one lakh, credit balances, passbook.

Now there is a direct transfer to one lakh with the 5000 on the credit side of passbook but there is no entry in the cash book the balances for cash book is one lakh balance as copass bukas two lakh rupees the 5000 now we are moving from passbook to cash boop So, we have to reduce one lakh 35,000 in our bank reconciliation statement. In other words, when there is a direct credit by the customer in the past book, the balance in the past book has increased to that extent but since the same is not recorded in the cash book your balance in the cash book is less as compared to the past book to the extent of one lakh 55,000. Now since we are moving from passbook to cash book, we had to reduce one lakh 55,000 in our bank reconciliation statement. Let's do that. Let's direct bank transfer not recorded in the books of accounts one lakh 55,000.

Now the next transaction fight 20th of 2019 interest credit 2500. Now there is an interest which is credited by bank and the same is not recorded in the cash book. Let's prepare a working note for this and analyze it for the first we have cash flow and passport. So one leg caspo cashbook and one leg as possible. Now, there is an interest which is credited among this 2500. Now, there is no entry for this in the cash book.

So, balances for cash book is one lakh balance as the boss Booker's one lakh 2500 now, we are moving from passport to cash books we have to reduce 2500 in our bank reconciliation statement. In other words, when the interest is credited in the past book the balance of past book has increased. Now, the same is not recorded in the cash book. So, if you compare the balance of cash flow, it will be less as compared to pass boo to the extent of 2500. Now, since we are moving from passbook to cash book we have to reduce this 2500 and bank reconciliation statement. Let's do this less interesting Income credited by bank not recorded in the books 2500.

Now, this was the last transaction. Now, let's take the total and find out the balance as the cash flow one lakh 25 740 here does three lakh 34,000 you have to reduce the final amount is 206678 Now, this is balance as cashbook and since this is positive it will be normal debit balance. Now let's verify this balance that is 20 lakhs 66,007 80 with our bank account us for books this is bank account asper books 28 or 2019 by balance carried down 20 lakhs 66,007 at So, this is same as we have derived in the bank reconciliation statement as long 20th 2019. So, this is one way to cross check if our bank reconciliation statement is correct. And similarly, we can also prepare a bank reconciliation statement wherein, we can take a balance of cash book as on 25th 2019 and we can calculate and derive the balance as per bank statement as on 20th 2019 balance as per bank statement has to match with this 22 lakhs 75 040 credit balance as per bank statement as on 20th 2009.

So, this was about how to prepare a bank reconciliation statement, wherein we are given the opening bank reconciliation statement and the cash book and pass book for particular period.