Question

Describe the causes of disagreement between the balance shown in the cashbook and passbook​

Answer 1

Answer:

The banker has recorded bank charges, interest on overdraft etc. ii. The banker has paid insurance premium, subscription for periodicals,etc. on behalf of the customer as per the standing instructions.

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Answer 2

The following are the most common causes or explanations for the balance difference between the pass book and the cash book:

• Cheques were issued, but they were never submitted for payment.
• Cheques that have been paid or deposited but have not been collected or credited by the bank.
• The bank credits interest, but it is not recorded in the cash book.
• Bank fees, commissions, and interest on overdrafts are deducted but not recorded in the cash book.
• Expenses paid directly by the bank on the customer's behalf but not reflected in the cash book.
• Directly collected by the bank on the customer's behalf but not recorded in the cash book.
• Debtors put money directly into the bank, but it is not recorded in the cash book.
• Cheque placed at the bank, however it was returned unpaid.
• Dishonor of a bill that has been discounted by the bank.
• Errors in the cash book and the pass book

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