Bank Reconciliation Statement Solved Examples for B.Com Students

For B.Com Students | Financial Accounting — Bank Reconciliation

A Bank Reconciliation Statement (BRS) is one of the most practical topics in Financial Accounting. Every accountant in an office prepares it regularly, and university exams ask it in many forms. This guide explains why the cash book and pass book differ, the step-by-step method, and several solved BRS problems.

For hands-on practice on real data, a practical tally course in Kolkata can help you apply these concepts at work.

1. What Is a Bank Reconciliation Statement?

A business records bank transactions in the bank column of its Cash Book. The bank records the same transactions in its own ledger and sends a copy as the Pass Book or Bank Statement.

On any date, the two balances may not match. A BRS is a statement prepared to explain the differences and reconcile the two balances.

Note the sides: a favourable balance is a debit in the Cash Book but a credit in the Pass Book, because the bank owes that money to the customer.

2. Causes of Difference

3. Step-by-Step Method

1. Start with one balance (for example, balance as per Cash Book).
2. For each item, ask: Has this item made the starting balance higher or lower than the other balance?
3. If the starting balance is lower because of an item, add it. If it is higher, subtract it.
4. The final figure should equal the other balance.

Many students prefer the “plus” and “minus” column format shown below.

4. Solved Example 1 — Favourable Balance as per Cash Book

Question: On 31 March, the Cash Book of Ritu Traders showed a debit balance of ₹42,000. Prepare a BRS from these details:

1. Cheques issued ₹12,000 not yet presented.
2. Cheques deposited ₹8,000 not yet credited.
3. Bank charges ₹500 debited in the Pass Book only.
4. Interest ₹1,200 credited by the bank only.
5. A customer directly deposited ₹5,000.

Solution:

5. Solved Example 2 — Starting from the Pass Book

Question: The Pass Book of Arjun & Co. shows a credit balance of ₹25,000 on 30 June.

1. Cheques of ₹6,000 deposited but not collected.
2. Cheques of ₹9,500 issued but not presented.
3. Insurance premium ₹2,000 paid by bank on standing instruction.
4. A cheque of ₹1,500 deposited was dishonoured; not recorded in Cash Book.

Solution:

Logic check for item 3: the bank already reduced its balance for insurance, but the Cash Book has not. So the Cash Book balance is higher — when starting from the Pass Book, we add it.

6. Solved Example 3 — Overdraft Balance

An overdraft means the business owes money to the bank. It is a credit balance in the Cash Book and a debit balance in the Pass Book.

Question: Overdraft as per Cash Book on 31 December is ₹30,000.

1. Cheques issued ₹7,000 not presented.
2. Cheques deposited ₹10,000 not cleared.
3. Interest on overdraft ₹900 charged by bank only.

Solution (treat overdraft as a minus starting point):

7. Adjusted Cash Book Method

Some questions ask you to first prepare an amended Cash Book and then a BRS. Items that only the bank knows about (bank charges, interest, direct deposits, dishonoured cheques, standing instructions) are recorded in the Cash Book first. Only the timing differences (unpresented and uncleared cheques) and bank errors remain for the BRS.

Amended Cash Book for Example 1:

BRS: 47,700 + 12,000 − 8,000 = ₹51,700 — the same answer as before.

8. Common Mistakes

• Mixing up debit and credit balances for Cash Book and Pass Book.
• Treating an overdraft like a favourable balance.
• Forgetting that the date of the BRS matters — cheques presented after that date are still “not presented”.
• Not reading whether an item has already been recorded in the Cash Book.

9. Practice Questions

1. Cash Book balance ₹18,000 (Dr.). Unpresented cheques ₹4,000, uncleared cheques ₹3,000, bank charges ₹200. Find Pass Book balance. (Answer: ₹18,800)
2. Pass Book overdraft ₹12,000. Uncleared cheques ₹2,500, unpresented cheques ₹1,000. Find overdraft as per Cash Book. (Answer: ₹10,500)
3. Explain why a BRS is prepared and list four causes of difference.

For related practice, read Final Accounts Problems with Adjustments and Basic Accounting Terms. Revise entries in 50 Journal Entries with Examples.

Frequently Asked Questions

Is BRS part of the books of account?

No. It is a statement prepared for checking and control, not an account in the ledger.

How often should a business prepare a BRS?

Many businesses prepare it monthly. Larger organisations with many transactions may reconcile weekly or even daily.

Can software prepare a BRS?

Yes. Tally Prime has a bank reconciliation feature. Practise it in the Tally Prime Practice Lab or try real office tasks in the Practical Lab.

Which balance should I start with?

Either. Questions usually tell you which one is given. The logic of adding or subtracting changes depending on the starting point.

Final Thoughts

BRS becomes easy once you think like a banker and like an accountant at the same time. Solve one problem from each type — favourable balance, Pass Book start and overdraft — and you will be ready for most exam questions and for real office work.