Question

If we start the preparation of Bank Reconciliation Statement with balance as per Cash Book what effect does the following have in it? (i) Interest allowed by Bank (ii) Dividends on share collected by Bank​

Answer 1

The BRS is shown below:

Explanation:

Bank reconciliation statement is the statement which states the process, in which it explains the difference on the particular date among the bank balance shown in the business bank statement, which as supplied through the bank and amount shown in the business accounting recording prepared by them.

1. When the BRS is prepared as per the cash book, then the interest allowed through the bank, then it will be added to the balance as per cash book.

2. When the BRS is prepared as per Cash book, then the dividends on shares which is collected through bank will be posted in the adjusted cash balance at the debit side, not in BRS.

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