DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name of the Participant : M. Ramakrishna
Designation : Head of Section
Branch : Commercial & Computer
Practice
Institute : Govt. Polytechnic for women,
Bheemunipatnam
Year/Semester : I Year
Subject : Accountancy-I
Sub-code : CCP-102
Topic : Bank Reconciliation
Statement (Overdraft)
Sub Topic : Exercises on Bank
Reconciliation Statement
(Overdraft)
Duration : 50 Minutes
Teaching aids : Power Point Presentation
CCP102.91 1
Objectives
At the end of this class, the student would be able to :
 Analyze the Transactions of bank reconciliation
statement
 Prepare B.R.S from O.D balance of pass Book

CCP102.91 2
Recap

 We have discussed the preparation of Bank

Reconciliation Statement taking O.D Balance as
per Cash Book considering all important Transactions

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Exercise
Prepare Bank Reconciliation Statement as on 31-12-2007

3. Overdraft balance as per Pass book Rs. 9,000

4. Cheques issued during the month were Rs.5,000;
out of which cheques presented for payment Rs.2,000.
3. Cheques deposited during the month worth Rs.2,500
were collected on 04-01-07
4. An amount of Rs. 150 has been debited as interest
on overdraft and this has been informed to the trader
on 5-1-08.

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Exercise (contd.)
.
5. The trader is unaware of the following transactions
done by the bank
 Amount deposited by the debtor directly in the bank
Rs.600
 Bank expenses Rs.40
 Refund of Income-tax paid Rs.60
 Interest on debentures collected Rs. 400
Ans:Overdraft balance as per Cash Book
Rs.10,370

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Transaction: 1

Cheque issued during the month were Rs.5000,out of

Which cheques presented for payment Rs.2000

Explanations
When cheques issued the Cash Book is Credited
resulting Higher O.D Balance
 As the Cheque is not presented,the Pass Book
shows lower O.D Balance
 We have started the Reconciliation from Pass Book
which has lower O.D: - ADD

CCP102.91 6
Transactions 2

Cheque deposited during the month Rs.2500,

was collected on 4-4-07
 Explanation
 When cheques deposited the Cash Book is debited
resulting in lower O.D Balance
 As the Cheque is not collected,the Pass Book
shows higher O.D Balance
 We have started the Reconciliation from Pass Book
which has higher O.D : - Less

CCP102.91 7
Transactions 3
Amount of Rs.150 has been debited as interest on
overdraft and this has been informed to the Trader on
5 -1 -08

 Explanation
 Interest on Overdraft is first recorded in Pass Book
on the Debit side. Hence the O.D Balance is higher
 As there is no corresponding entry in Cash Book,
Cash Book shows lower O.D Balance
 We have with the pass Book O.D balance Which is
Higher :. LESS

CCP102.91 8
Transaction 4
Amount Deposited by the Debtor Directly into bank
Rs.600
 Explanation
 When amount is Deposited Directly into Pass Book,
it results in lowering the O.D Balance
 As there is no Correspondence entry in Cash Book
the Cash Book O.D is higher
 As we have started problem with Pass Book O.D
which lower :. ADD

CCP102.91 9
Transaction 5

Bank Expenses Rs.40

 Explanation
 When Bank Expense Entered in Pass Book, It
results in higher O.D balance
 As there is no correspondence entry in Cash book,
it is showing lower O.D Balance
 We have started with O.D of Pass Book which is higher
:. LESS

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Transaction 6
Refund of Income Tax paid Rs.60/-

 Explanation
 When Refund of Income tax is received by bank, It
is Credited, resulting in Lower O.D
 As there is no Correspodence entry in Cash book,
The O.D balance
 We have started the problem with Pass Book O.D
which is Lower:. ADD

CCP102.91 11
Transaction 7
Interest on Debentures collected Rs.400/-

 Explanation
 When interest on Debentures Collected,It is entered
on credit side of P.B resulting in Lower O.D balance
 As there is no correspondence entry in C.B, the O.D
balance is Higher
 We have Started the problem with Pass Book, the
O.D which is Lower :. ADD

CCP102.91 12
 Solution
Bank reconciliation Statement as on 31-12-07
O.D balance are as per Pass Book Rs Rs9000
Add
Cheque issued but not presented 3000
Direct payment by a customer into Bank 600
Interest on debentures credited in Pass
Book 400
Refund of income tax entered in P.B ______________
60 4060
Less 13060
Cheques deposited but not collected 2500
Interest on O.D entered in Pass Book 150
Bank expenses entered in Pass Book _______
40 ______
2690
O.D balance as per Cash Book 10370
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Summary
We have prepared a Bank Reconciliation Statement
Covering all important Transaction and starting with
O.D Balance of Pass Book

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Quiz
1. Refund of income tax received by the bank on behalf of
the customer is entered
a) On the Debit Side of Pass book
b) On the Credit side of Pass book
c) None

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 Assignment:
The Overdraft balance as per pass book was Rs.8,312
on31-12-06. However , the balance of cash book is
Disagreeing and showing a overdraft balance of Rs.8500
On comparison of entries in the pass book the
Discrepancies have been found.
 A cheque issued on 23-12-06 for Rs.508 was cashed
on 15-1-07
 A cheque for Rs.125 was sent to the bank for
collectionon 28-12-06 but collected in January.
 Bank expenses of Rs.15, interest on overdraft Rs.25
have not been recorded in the ash book.

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 (Problem Contd.),

4. A cheque received for Rs.125 was recorded in

the
cashbook but omitted to sent to the bank
5. Interest credited in the pass book only Rs.50
6. A cheque received for Rs.80 has been posted
twice in the cash book.
 (O.D balance as per cash book 8,500)

CCP102.91 17