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Answer Posted / murali koda
Hi Friends.
The following procedures are followed while preparing the
bank reconciliation statement:
* Compare cash book and pass book items.
* Give sign to all the items of cash book and pass book
which are matched with each other.
* Make a list of unmatched items found in cash book and pass
book.
* Prepare bank reconciliation statement taking balance
either from cash book or pass book as a basis.
* Adjust the items which cause the disagreement in the
balances. Add the items which have decreased the balance on
the book with which reconciliation is to be made. On the
contrary subtract the amount of those items which have
increased the balance.
These procedures should be followed only when the cash book
and pass book are to be compared. But if causes of
differences are already given, the above procedures need not
be followed.
If the causes of disagreement between the cash book and pass
book balances are given, the bank reconciliation statement
can be prepared either by taking the balance of cash book or
pass book. The bank reconciliation statement can be prepared
by using either of the following bases.
* Debit balance shown by cash book
* Credit balance shown by cash book (bank overdraft)
* Credit balance shown by pass book
* Debit balance shown by pass book (bank overdraft)
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