Question

Explain the reasons where the balance shown by the bank passbook does
not agree with the balance as shown by the bank column of the cash book.

Answer 1

The reasons that the balance of bank passbook does not match with the amount shown by the cash book's bank column are time lag difference and errors.

Explanation:

In order to maintain proper balances in both pass book and cash book, it is important to get your transactions recorded time to time. When balances do not agree with each other, the situation of discrepancies can occur in the balances.

The reasons that the balance of bank passbook does not match with the amount shown by the cash book's bank column are as follows:  

i. Difference can occur due to time lag between the time of recording transactions.

ii. Quench issued and deposited but not yet presented and cleared.

iii. Errors and omissions can also be a reason for the disagreement between both the balances.