Hello everyone, in this session, we will be seeing an example of bank reconciliation statement wherein we are given a bank account as for books and a bank statement from Bank. So looking at the transactions in the bank account and the bank statement, we will be preparing a bank reconciliation statement as on a particular day. Now, let's see this example first messages so GM limited has started a trading business on first Jan 2009. So it's a new business which is started on first Jan 2019 in the books of masses so damn limited ABC bank account. So this is a bank account in the book So, Mr. Sue GM limited. So, you have debit credit deed particulars voucher number amount, they particular voucher number amount.

So, we have all the debit and credit entries here then on 31st jan 2019 by balance carried down 21 lakh 79,000 the same is carried forward on first 2019 to balance brought down 21 lakh 79,000 So, it said debit balance as books of accounts. Then we have bank statement of ABC Bank of missiles to them limited from first Jan 2019 to 34 Shan 2019. Then we have a bank account number and we have day, particular transaction ID or check number We have withdrawals or debit deposits or credit and balance as on that particular day. So, these are the transactions which are given in that bank statement and a bank account. Now, since this is a new business there is no opening balances on first gen 2019. Now, we will we see each and every transaction in your bank account and the bank statement and we will be matching all the transactions.

So, when that if the transaction is appearing in the bank account and the bank statement, then it won't appear in the bank reconciliation statement. So, we will be finding out those transactions which are there in the bank account but not there in the bank statement or which are there in the bank statement but they are Not there in the bag. So let's see all the transactions on the debit side of bank account first so this transactions will appear on the credit side of your bank statement. Let's see the first one second Jan 2019 to cash account 123456 be 0018 lakhs, so this is cash deposited. Let's see if it is appearing in a bank statement. So second gen 2019 we have cash deposited.

Let's check the transaction ID in the check number 123456 deposit credit eight lakhs. So let's map this transaction. Next, fifth, Jan 2019. To loan from the bank account. Check numbers 351274 bR 00 to 15 Let's let's see on the credit side of the bank statement. So we have Rena bank loan check 351274 amount is 15 lakhs.

Let's move this next 38 Jan 2019, two muscles sahana limited fine 984720032 lakh 75 500. Let's see on the credit side of the bank statement, two lakhs 75 500. So if you see we can't see any amount of to like 75 500 on the credit side of the bank statement. So this transaction is not appearing in the bank statement. So we won't mark this transaction will keep it as this now let's see that redditt side of the ABC bank account not credit side of ABC bank account is your debit or withdrawals in the bank statement. Let's see all the transactions one by one, six Jan 2019.

By rent account five and six to seven one be p 001 is the internal voucher number amount is 20,000. Let's see on the debit side of the bank statement. Now, on the debit side we can see 20,000 Now, whenever you're verifying a particular transaction, it is important to match the transaction with the transaction ID or the check number. Now it may happen that there may be many transactions of the same amount. So you have to verify the transaction with the check numbers object number transaction ID is unique. It's different for each and every transaction.

So now this is the amount 20,000. Now what is the check number here by 162715 and six to seven one. So let's map this transaction. Next seven Jan 2019. Bye See my enterprises five and six to seven to be p 00 to 76 500. Let's see.

Now if you see on the debit side of your bank statement, we can't find the amount of 76 500. So it's not that in the bank statement, we won't have this transaction next to well Jan 2019 by cash account, five and 6273 b p 0032 lakh 50,000. On the debit side we have two lakh 50,000. Now let's verify your check number five and six to seven entry, so it matches with the bank account. Let's map this transaction. Next 25th jan 2019 by Raghavan sensor con five and six to seven for bp 00 for 50,000.

Let's see. So we have a mount of 50,000. In the debate, let's verify the check number five and 6274. It's the same one. So let's map. So now, all the transactions all the common transactions between the bank account and the bank statement are highlighted.

Now, there are certain transactions which are appearing in the bank account but seem are not there in the bank statement and vice versa. Now this transactions will be About bank reconciliation statement. Let's see all those transactions. So let's number this transaction, this is one, this is two, then this is three, four by six, seven. So we have seven transactions which are either in the bank account or in the bank statement. Now, let's see all those transactions one by one.

First we'll prepare a bank reconciliation statement. Either it can begin with the balance as For your bank account and then move from bank account to bank statement or vice versa. Now here we are given the balance as on 34 jan 2019 as per your books of accounts as well as bank statement, so we can always cross verify whether our bank reconciliation statement is correct. Now, let's prepare a format of bank reconciliation statement. We will start from our bank account as per books and we will move towards our bank statement. Let's begin.

This is a bank reconciliation statement balance as per cash books 21 lakh 79,000 Now let's see all the transactions one by one. 138 jan 2019 two muscles Hannah limited 59847 into be r 0032 lakh 75 500. Now, this is a check number 598472 other spine 98472 is received from muscles are not limited. So, this is the check which is received and deposited in the bank, but it is not yet cleared. So, it is not appearing in the bank statement. Now, the check has been received from Mr zahana limited so, it is recorded in the bank account.

So, to that extent your balance in the bank account is increased now, since this check is not yet cleared it is not appearing in the bank statement. So, your balance in the bank statement will be less as compared to your balance in the bank account to the extent of two lakh 70 By 500 now here we are moving from your cash book to bank statement. So, we have to reduce to like 75 500 in the bank reconciliation statement, let's prepare a working node working note number one, this is a cash book this is a fast move. Now since the transactions amount of the transaction is more or less assume that the balance as per cash book is 10 lakhs they're based debate and pass Lucas 10 lakhs credit. Now this check has been deposited in the bank. So there is the entry in the cash Book Two lakh 75 by hundred but since it does not clear there is no entry in the past.

So, the balance asper cash brokers 12 lakh 70 Bye bye hundred balances for past Booker's 10 lakhs now we are moving from cashbook to pass boo Soviet to reduce two lakh 75 by hundred in bank reconciliation statement. Let's do this let's check deposited but not clear two lakh 75 500 next seven Jan 2019 Bye See my enterprises jack number five and six to seven two dp 00 to 76 500 so this check is issued to see my enterprises but it is not presented for payment so it is not appearing in the bank statement. So what has happened to you since the check has been issued to see my enterprise We have recorded it in our bank account as Bob books. So the balance in the bank account as per books is less to the extent of 76 500. But since the same is not appearing in the bank statement, your balance as per bank statement is great by 76 500 as compared to bank account.

Now in bank reconciliation we are moving from your bank account asper books to bank statement so we have to add 76 500 in bank reconciliation statement. Let's prepare a walking North for this. Do we have cash both and we have basil. Let's assume the balances 10 lakhs debit and cash book 10 lakhs credit in passbook now, this is check in should search will appear on the credit side of cash flow, but it does not present it so it won't appear in the past. Now, the balance I spoke as workers, nine lakh 23 by hundred past workers 10 lakhs now we are moving from your cash book to passport so we have to add 76 500 in bank reconciliation statement let's do this check issued but not present that 76 500 Now let's see the next transaction three nine Jun 2019 parama limited direct bank transfer, we have a transaction ID here and among this one lakh 25,000 so that was a direct bank transfer.

So there was a payment by your bank directly to parama limited. Now, these amount is not recorded in the bank account as books. So, now, what has happened to you since there is a direct bank transfer to parama limited of one lakh 25,000 your balance as per bank statement is less as compared to your balance as per bank account by one lakh 25,000. Now, here we are moving from your bank account as per books to bank statement. So, we have to reduce this amount of one lakh 25,000 in the bank reconciliation statement. Let's prepare walking North for this.

So, we have a cash book boss 10 lakhs debit balances but cashbook 10 lakh credit balances for possible there is a direct transfer or direct payment by the bank. So, one lakh 25,000 on the debit side of passbook but there is no entry in the cash book. So, the balance as per cash bukas balance as purpose group is it like 75,000 we are moving from cash book to pass book. So, we have to reduce one lakh 25,000 in the bank reconciliation statement. Let's do this less direct payment by bank not recorded in the books of accounts one lakh 25,000 Now, let's see the next transaction for 19 jan 2019 missiles sukanya direct bank transfer we have transaction ID One lakh 50,000 on the credit side. So, Mrs sukanya has deposited one lakh 50,000 directly in our bank account, this has been recorded in our bank statement, but it does not record it in the bank account as books.

So, what has happened two years since there is a direct credit in our bank statement or balance in the bank statement has increased, but the same is not recorded in our bank account as per books. So, the balance as per bank account to that extent is less as compared to the bank statement. So, in a bank reconciliation statement, we have to add one lakh 50,000 since we are moving from your bank account to bank statement. Let's prepare well notes for this for cash possible then access book cash flow and lacks as possible. Now there is a that credit in our past books one lakh 50,000 on the credit side of passbook there is no entry in the cash book. So, balance as book cash bukas 10 lakhs balance as purpose Booker's, leaven lack the details.

So, we are moving from cash book to pass book. So we had to add one lakh 50,000 in bank reconciliation statement. Let's do this add direct bank transfer credited in the bank, but not recorded in the books of accounts one lakh 50,000. Now, the next generation Section 529 jan 2019 bank charges. So we have a transaction ID and 1200. So, there are certain bank charges which are debited in the bank statement, but same are not recorded in the bank count as books.

Now, what has happened is because of this bank charges, the balance in the bank statement has reduced by 1200. But since the same are not recorded in the bank account as per books your balance as per bank account in the books is more as compared to the bank statement. Here we are moving from your bank account to bank statement so we have to reduce those bank charges and bank reconciliation statement. Let's prepare working not for this fifth gash, passbook 10 lakhs us gospel and lacks as possible bank charges are debited in the past books are 1200 in the past book boy entering the cash balances for cash flow plus 10 lakhs balance so passbook is now nine lakh 98 now we are moving from cash to fast food, so we have to produce 1200 in the bank reconciliation statement let's do that less bank charges debited in the bank statement but not recorded in the books of accounts 1200.

Now let's see the next transaction 630 was Jan 2019 interest we now bank direct transfer. We have transaction ID one lakh 80,500. Now there was some interest which was paid to be Bank directly by bank transfer. So, it is appearing in the bank statement, but same is not recorded in the books of accounts. So, what has happened because of this interest debited is that your balance in the bank statement has reduced by one like 87 500 but since the same is not recorded in the books of accounts, your balance in the bank account as per books is greater than the bank statement. Now, here since we are moving from the bank account to bank statement, we have to reduce this one lakh 87 500 in our bank reconciliation statement.

Let's prepare a working note for this six. We have cash fast and live debit despo gospel then lack credit and Both possible now there is an interest which is there bitted in the past book, so, one lakh 87 500 there but no one dream the cash balance as per cashbook is 10 lakh balance as the boss book is it 125 hundred. Now we are moving from cash to pass boo. So, we have to reduce one lakh 87 500 in bank reconciliation statement, let's do that less interest payment by bank not recorded in the books of accounts one lakh 87 by hundred now next transaction seven that differs Jan 2019 Bank interest we have transaction ID 2000 sources This is on the credit side of bank we have received this interest from the bank. So, bank is credited 2000 in a statement. Now, this is not recorded in our books of accounts.

So, what has happened is because of this, there is an increase in the balance as per bank statement, but since the same is not recorded in the books have a balance in the books of accounts is less to the extent of 2000 since we are moving from your bank account to bank statement, so, we have to add this 2000 in the bank reconciliation statement. Let's prepare the walking note for this seven cash fast then max debit and Max credit. So, interest credited by bank But it is not recorded in the books of accounts. So balances for cash bukas 10 lakhs balances purpose focus. Now we are moving from cash books to pass book so we have to add 2000 bank reconciliation statement, let's do this add bank interest credited but not recorded in the books of accounts 2000 Now this was the last transaction. Now let's take a total and find out what is the balance as per bank statement as on 31st jan 2019.

So, the total of this two lakh 28 by hundred I like it denine 200 we have to produce So, granny one lakh 79,000 plus two lakh 28 500 minus bilac 89 200 is 1818 300 This is balance as per bank statement since we are given both your bank account and bank statement, we can always cross verify if this balance is correct 1818 300 this balance has to match with the bank statement as on 31st jan 2019. Let's check the balance bank balance as per bank statement on 31st jan 2019 is 1818 300. Now, this is one way to cross verify whether all reconciliation items are considered in bank reconciliation statement and your bank reconciliation statement is correct. So, in bank reconciliation statement, we have to always verify the balances. As for your books of accounts, and your bank statement, as long particular date. Now, there is one more way in which a bank reconciliation statement can be prepared, we can begin with the balance as per bank statement.

And then we can derive at the balance as for our books of accounts, now prepared this bank reconciliation statement by yourself. And then let's verify one more way of preparing a bank reconciliation statement, wherein we have started with balance as per bank statement. And we are finding our balance as the cash book or we can say balance as per bank account in our books of accounts. So this was all about our example on bank reconciliation statement, wherein we are given a cash book and a bank statement, and we had to prepare a bank reconciliation statement.