From the following particulars, prepare the bank reconciliation statement of Shri Krishan as on March 31, 2017. (a) Balance as per passbook is Rs. 10,000. (b) Bank collected a cheq... From the following particulars, prepare the bank reconciliation statement of Shri Krishan as on March 31, 2017. (a) Balance as per passbook is Rs. 10,000. (b) Bank collected a cheque of Rs. 500 on behalf of Shri Krishan but wrongly credited it to Shri Kishan's account. (c) Bank recorded a cash book deposit of Rs. 1,589 as Rs. 1,598. (d) Withdrawal column of the passbook under cast by Rs. 100. (e) The credit balance of Rs. 1,500 as on the pass-book was recorded in the debit balance. (f) The payment of a cheque of Rs. 350 was recorded twice in the passbook. (g) The pass-book showed a credit balance for a cheque of Rs. 1,000 deposited by Shri Kishan.
Understand the Problem
The question is asking to prepare a bank reconciliation statement based on the provided financial details regarding Shri Krishan. The task involves adjusting the passbook balance by accounting for discrepancies noted in the transactions.
Answer
The final balance is Rs. 11,241.
Answer for screen readers
The bank reconciliation statement balance for Shri Krishan as of March 31, 2017, is Rs. 11,241.
Steps to Solve
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Starting Balance Begin with the balance as per the passbook:
Balance = Rs. 10,000 -
Adjust for Cheque Collected by Bank The bank collected a cheque of Rs. 500 on behalf of Shri Krishan, but this was not credited to his account.
Adjust the balance:
$$ \text{New Balance} = \text{Old Balance} + 500 $$ New Balance = Rs. 10,000 + Rs. 500 = Rs. 10,500 -
Adjust for Incorrect Deposit Entry The bank recorded a cash book deposit of Rs. 1,589 as Rs. 1,598. This means the bank recorded an excess of Rs. 9.
Adjust the balance:
$$ \text{New Balance} = 10,500 - 9 $$ New Balance = Rs. 10,500 - Rs. 9 = Rs. 10,491 -
Adjust for Under Casting of Withdrawal Column The withdrawal column of the passbook was undercast by Rs. 100.
Adjust the balance:
$$ \text{New Balance} = 10,491 - 100 $$ New Balance = Rs. 10,491 - Rs. 100 = Rs. 10,391 -
Adjust for Overstatement of Credit Balance A credit balance of Rs. 1,500 was incorrectly recorded in the debit balance.
Adjust:
$$ \text{New Balance} = 10,391 + 1,500 $$ New Balance = Rs. 10,391 + Rs. 1,500 = Rs. 11,891 -
Adjust for Cheque Payment Recorded Twice The payment of a cheque of Rs. 350 was recorded twice.
Adjust:
$$ \text{New Balance} = 11,891 + 350 $$ New Balance = Rs. 11,891 + Rs. 350 = Rs. 12,241 -
Adjust for Cheque Credited Again Finally, the passbook showed a credit balance for a cheque of Rs. 1,000 which was recorded.
Adjust:
$$ \text{Final Balance} = 12,241 - 1,000 $$ Final Balance = Rs. 12,241 - Rs. 1,000 = Rs. 11,241
The bank reconciliation statement balance for Shri Krishan as of March 31, 2017, is Rs. 11,241.
More Information
A bank reconciliation statement helps to ensure that the financial records align with the bank's records. It identifies discrepancies between the two and adjusts them accordingly. This process is crucial for effective financial management.
Tips
- Forgetting to adjust the balance for errors made by the bank (such as undercasting or overcasting).
- Not accounting for transactions that may not appear in one of the records.
- Misplacing the adjustment signs (adding instead of subtracting, or vice versa).
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