BRS in Accounting

 

BANK RECONCILIATION STATEMENTS

Thanks to MBA Devindar Sir

BRS - Bank Reconciliation Statement

1) BRS is started with  cash book or pass book balance.

2) Error in bank passbook will not require adjustment in the cash book balance.

3) BRS is prepared by account holders/customers

4) BRS is prepared to find reason of the differences in passbook and cashbook

5) BRS is not a double entry system

6) BRS can be prepared anytime in a year monthly, quarterly, half yearly or yearly

Definition of BRS:-

BRS is a statement to the council

the Bank balance as per cash book With

The Bank balance as per Bank passbook (bank statement)

Q.1. state any two reasons of difference between cash book and bank passbook balance?

Ans. 1. Check deposited but not credited

          2. Check issued but not presented for payment.

Q.2 effect of direct payment on passbook?

Ans. Increase the credit balance and decrease debit balance in the passbook.

Q.3 State any two transactions which may be recorded in cash book but not in passbook?

Ans.

1) cheque issued but not presented in the bank for payment.

2) check deposited into bank but not credited or collected.

3) cheque deposited but dishonoured

4) check recorded but not deposited

Q. 4. State two transactions which may be recorded in the passbook but not cash book?

Ans.

1) interest allowed or credit by bank.

2) Bank charges and charged by the bank

3) charges of exchange realised

4) cheque deposit dishonored

  5) check or cash deposited directly into the bank

Q. 5. Difference between B.R.S. and B.S./Pass book.

Ans. BRS

1) it is prepared by the account holders

2) it is not compulsory

3) definition:-

Bank statement/pass book

1) it is prepared by the bank.

2) it is necessary for the bank to prepare it.

3) definition:- it is prepared to inform the customer about all transaction in a period.

Q. 6. Difference between cash book and B.S./Pass book.

Ans. Cash book

1) it records the cash and Bank transactions

2) it's all transaction are recorded by the business

3) balance of adjusted cash book finds a place in balance sheet.

Passbook/bank statement

1) it is issued by bank to the account holders to show the details of transactions.

2) it's all transactions are recorded by bank

3) balance of passbook does not find a place in the balance sheet.

Most important points:-

1) Debit balance as per  cash book means

                  credit balance as per bank passbook.

2) credit balance as per cash book means

   Debit balance as per bank statement /Bank passbook

3) credit balance as per passbook/ B.S. means

     Debit balance as per cash book.

4) Dabit balance as per  passbook means

     Credit balance as per cash book.