Cash balance at the bank of a company and the cash balance maintained at the companys cash book often do not match due to a number of factors. Ppt cash balance plans powerpoint presentation free to. Cash book is a book of original entry in which transactions relating only to cash receipts and payments are recorded in detail. Lecture 5 cash book and petty cash book complete concept. A bank reconciliation statement can be prepared by taking the balance either as per cash book or as per pass book as a starting point. Both balances are equal but opposite generally these two balances do not agree. Simply run the presentation in class and youll have a customized game all ready to go for your students. Causes of difference in the balance of cash book and pass book unpresented cheques are those cheques paid out to the creditors of a business and already recorded in the cash book of the business. From cash book to pass book elearning, etutoring, school. A book balance is the account balance in a companys accounting records. Bank reconciliation statement is prepared on a particular date to reconcile the bank balance as per the cash book with the balance as per the bank pass book. Cash book deals with cash transactions and pass book deals with bank transaction.
If the customer receives the statement of account on april 4, 2003, there will be a difference of rs 500 bewteen the balance shown by the cash book and the balance shown by the pass book. The balances reflected in the passbook must match with the balance so calculated in the cashbook. Determing cash balance per books before adjustments. Key difference cash book balance vs bank statement balance cash balance at the bank of a company and the cash balance maintained at the. To ascertain the balance of cash in hand and at bank at any time without actually counting cash and examining bank passbook to verify the correctness of cash in hand and bank. Difference between cash book balance and bank statement balance. Passbook is issued by the bank to the account holder that records the deposits and withdrawals. Earlier the bank balance as per cash book was rs 28000 and the bank balance as per pass book was rs 29500. Bank reconciliation statement authorstream presentation.
For example, the book balance at june 30 refers to the balance in the companys general ledger account cash or checking account. Basic logic is, you can not pay what you dont have. Aug, 2014 cash book a cash book is a book of primary entry. For an individual, the book balance is likely to be the balance appearing in the persons check register. Similarly, when cash is paid out the same is recorded on the credit or right hand side of the cash book the cash book, though it serves the purpose of a cash book of original entry viz. At in balance books we analyze and then tell the story behind the numbers. If the statement is started with the balance as per bank column of the cash book, the answer arrived at the end will be balance as per pass book. Balance sheet simple report on your assets and liabilities with this accessible balance sheet template. The bank balance as revealed by both the books is the same. The total of discounts column on debit side of the cash book, recording cash discount deducted by customers when paying their accounts, is posted.
Features of cash book to keep record of only cash transactions all receipts are recorded in debit side all payments are recorded in credit side chronological date wise transaction recording of all transactions. Amounts debited by the banker in the pass book without the immediate knowledge of the customer. All cash transactions are recorded in the cash book. Jul 21, 2017 key difference cash book balance vs bank statement balance cash balance at the bank of a company and the cash balance maintained at the companys cash book often do not match due to a number of factors. Difference between cash book and pass book youtube. If the cash book shows credit balance, then the accounting system is not properly followed. Funds on deposit prior to any adjustment for check clearing, float funds or reserve requirements. You can then customize them with your own questions and answers. A bank reconciliation is used to compare your records to those of your bank, to see if there are any differences between these two sets of records for your cash transactions. Our account is debited with bank charges and interest on overdraft and intimation is sent to us by the bank. Report on your assets and liabilities with this accessible balance sheet template. Causes for difference between cash book balance and pass book balance.
Need and importance of bank reconciliation statement 14. What are the causes of disagreement between cash book and pass book. The cheques paid into bank for collection but not credited into the account of the customer, because. The balance on june 30 in the companys general ledger account entitled checking account is the book balance that pertains to the bank account being reconciled.
We provide bookkeeping services in a professional, legal, and timely manner. From pass book to cash book elearning, etutoring, school. If one looks at the debit side of the cash book and the deposits column of the pass book, and checks item by item, one will find that the following cheques deposited with the bank were not credited by the bank till 31st january, 2012. For this, there will be a disagreement between cash book and pass book. Total of credit side bank column in cash book was under cast by rs.
Bank reconciliation statement part 5 commerce notes edurev. Ppt bank reconciliation statement powerpoint presentation. Causes of disagreement between the balance shown by the cash book and the balance shown by the pass book. The term is also used to refer to the balance that is present in an account on the last day of the current banking period, or the end of the business month. Thus, companies are required to perform bank reconciliation that showcases the difference between the cash balance in companys cash account and the cas. Lets say you may want to see a running balance of items that you purchase so that you dont exceed your spending limits. Passbook is a book issued by the bank to the account holder which records the amount deposited inwithdrawn from the respective account dring a particular period is tracked. Difference between cash book balance and bank statement. Oct 22, 2017 in this video, i have discussed the concept of cash book and petty cash book and solved a practical question on cash book so that you get the concept clarity.
It is extremely common for there to be differences between the two balances, which. It is generally prepared as an annexure to the accounting period end financial statements to explain the difference between the balance as shown in the books and the balance shown by the supporting document i. With the help of pass book, banks inform their customer about the status of their account. Cash balance plan a cash balance plan shares some similar to a traditional pension plan. In cash book we enter day to day expenses incurred i. An epic story that moves with force, passion, and authority, balance of power begins when president kerry kilcannon and television journalist lara costello at last decide to marry. Deposits in transit deposits sent to bank by company and recorded in companys ledger as debits to the cash account 3. The term is most commonly applied to the balance in a companys checking account at the end of an accounting period. Understand the causes for disagreement between cash book and pass book balances. In short, you get all the benefits of a defined benefit plan or 412e3 defined benefit plan, except with cbps, you have much more flexibility traditional db and 412e3 plans can be somewhat inflexible and difficult to understand. An organization uses the bank reconciliation procedure to compare its book balance to the ending cash balance in the bank statement provided to it by the.
Cash book 19,680 pass book 19,680 the cheque issued on aug 11 th has been presented and got paid. In case balance available in the passbook doesnt match. Establishing a cash balance plan offers potential tax savings for employers. Serge company developed the following reconciling information in preparing its august bank reconciliation. The cash book shows a balance of rs 33,000, whereas the pass book shows a balance of rs 39,930. The difference between pensions and cash balance plans is a cash balance creates an individual account for each employee enrolled with a specified lump sum. To calculate a running balance, use the following procedure. Outstanding checks deposits in transit bank service charges and check printing charges errors on the companys books ele. But the momentous occasion is followed by an unspeakable tragedya massacre of innocents by gunfirethat ignites a highstakes game of politics and legal maneuvering in the senate, the courtroom, and across the. Checks deposited for collection but not yet collected and credited by the bank. Common causes of differences between the ending bank balance and ending book balance of cash.
The cash columns are balanced exactly in the same manner as indicated for the simple cash book. From the following information calculate balance a. Ppt bank reconciliation statement powerpoint presentation, free. Cash balance plans now make up 37% of all defined benefit plans, compared with 2. Jan 08, 2018 key differences between cash book and passbook. The paramount differences between cash book and pass book are explained in the given below points. Have our partners at excelchat fix your formulas, 247. Balances in the cash book are taken directly to the trial balance.
Download balance powerpoint templates and slide designs that you can use for balance comparison or use the balance shapes as metaphors of comparison slides. A check against the companys cash book revealed the following differences. Book balance book balance may be referred to as the balance per books, and it is the amount shown in the companys records. Whereas in pass book we enter all the day to day bank transaction whether it is a cash, cheque or dd. Passbook savings account penncrest bank altoona, pa. Thus, companies are required to perform bank reconciliation that showcases the difference between the cash balance in companys cash account and the cash balance according to its bank statement.
In short, you get all the benefits of a defined benefit plan or 412e3 defined benefit plan, except with cbps, you have much more flexibility traditional db and 412e3 plans can be somewhat inflexible and difficult to understand in a cbp, each participant has an account that resembles those in a 401. Causes of disagreement between cash book and pass book. Cash balance plan answer book is the only resource that provides reliable answers to over 500 cash balance plan questions. You can use a running balance to watch values of items in cells add up as you enter new items and values over time. So long the check is not presented to the bank, the cash book balance and the pass book balance will differ. You can use balance diagrams in powerpoint to represent evaluation of different options like the time vs. Brs is not prepared on every instance of a difference between cash book balance and bank pass book balance. On any particular date, the bank balance shown by the bank column cash book and that shown by the pass book should be the same. The purpose of a bank reconciliation accountingtools.
Cash book balance pass book balance more less example. What are some reasons that cause the balance on the bank. So there was a difference of rs 1500 in balance of both the books. A comparison of pass book and cash book revealed the following cheques amounting of rs. All of these powerpoint games are in the form of free powerpoint templates that you can open with microsoft powerpoint or a free presentation software program. Causes of disagreement between the balance shown by the cash. In dagoretti south constituency nairobi county, the audit revealed that sh156 million was supposed to be spent, but. It is common for the book balance to not agree with the balance on the bank. Bank overdraft has aa debit balance b credit balance c negative hollow d none of the above.
The book balance is the term banks use to describe the amount of money available. So, if the bank columns of the cash book show a debit balance as on a specified date, the bank statement should show an equal amount of credit balance as on that date and viceversa. In this video, i have discussed the concept of cash book and petty cash book and solved a practical question on cash book so that you get the concept clarity. Put the opening balance if any on cash in hand and cash at bank on the debit side in the cash book and bank columns. It is a snapshot of customers account in the banks book. Outstanding checks credits to cash accounts written by the company that havent been cleared yet 2. Contents reporting cash in the balance sheet definition of brs the purpose of the brs nature of the cash book and the bank statement reasons for difference between the cb and the bs rules of debit and credit in brs steps in preparing brs illustration 2. These figures are important as they provide a link between your cash receipt and cash payment entries and an understanding of what they represent is the key to ensuring that your cash book balance is correct. Objects or need of cash book to find out the total cash receipts and cash payments during a given period. Cash balance plans cbps are a special kind of defined benefit plan. Difference between cash book and passbook with comparison. When the cash book is open you will notice a number of figures in the grey area above the buttons near the foot of the screen.
Reasons for difference between bank balances as per cash book and pass book. Apr 29, 2018 a book balance is the account balance in a companys accounting records. A bank reconciliation statement can be prepared starting with the cash book balance or pass book balance. Exercise 70 excel practice book how to make gst invoice format in ms excel duration.
Ppt bank reconciliation statement powerpoint presentation free. Dormancy days post which the accounts are considered as dormant if there is no transaction performed during these days. This unique resource provides support as you consider and implement cash balance. The ending balance of your version of the cash records is known as the book balance, while the banks version is called the bank balance. Sometimes the bank balances as per cash book and bank statement doesnt match. Reasons a bank balance will differ from a companys balance some of the reasons for a difference between the balance on the bank statement and the balance on the books include.