On 31st January, 2019 Cash Book showed an overdraft balance of ’40,000. On comparing it with the Pass Book, the following differences were noticed:
(i) On 27th January, cheques amounting ‘6,450 were sent to bank, but out of these one cheque of ‘840 was credited on 2nd February and one cheque of ‘ 220 was returned by bank as dishonoured on 4th February.
(ii) During the month of January, cheques were issued worth ‘7,580. Out of these, cheques worth ‘ 6,420 were presented for payment on 5th February.
(iii) As per standing order, the Bank had paid the following amounts during January 2017:
Life Insurance premium ;710.
Electricity Bill ‘615.
(iv) Bank collected ‘500 as dividend on share and gave wrong credit for ‘650.
(v) Interest charged on overdraft by the Bank ‘600.
Prepare a Bank Reconciliation Statement on 31st January 2019
Answers
Answer:
Explanation:
Whereas balance in the Pass Book remains `10,000 until the cheque is presented for payment. (ii) Cheques paid into the bank but not cleared: As soon as cheques are sent to the bank, entries are made on the debit side of the bank column of the cash book.
How is a stale/stopped cheque reversed?
Manually record a deposit using Receive Money or a Journal Entry (general journal). If entering a manual reversal, ensure the allocation accounts and GST tax codes are the same as those used on the stale/stopped cheque.
Use your software's Reverse function.If the cheque is deposited on another day, in that case, on the date of receipt it is treated as cash received and hence recorded in the cash column on the receipts side. On the day of deposit to the bank, it is shown in the Bank Column on receipt (Dr.) side and in the Cash Column on the payment (Cr.) side.
Cheque issued but not presented for payment is a cheque which has been written and sent to the suppliers or creditors by the business. However, it has not yet been presented at the bank by the suppliers or creditors.