Fundamentals of Accounting · Bank Reconciliation Statement

Preparing BRS Starting from Pass Book Balance

Updated 11 October 2026 · Fact-checked

A BRS from the pass book balance starts with the bank's closing balance and adjusts it to reach the cash book balance. Add cheques deposited but not yet credited, and credits the bank made that you have not entered. Deduct cheques issued but not yet presented, and debits the bank made that you have not entered.

Understand Preparing BRS Starting from Pass Book Balance

The pass book is the bank's record of your account. The cash book is your own record of the bank column. On any date the two balances often differ, because each side records some items before the other does.

A bank reconciliation statement (BRS) lists those differences and shows that, once they are allowed for, both balances agree. You can start from either balance. Here you start from the pass book balance and finish at the cash book balance after the bank's items have been entered in the cash book.

Think of it as walking from the bank's figure to yours. Ask of each item: has my cash book recorded something that the bank has not, or has the bank recorded something that my cash book has not?

Items in your cash book but not yet in the pass book (cheques deposited but not credited, cheques issued but not presented): the pass book figure is out of line with your cash book, so adjust it. Cheques deposited but not credited are added. Cheques issued but not presented are deducted.
Items the bank has recorded but your cash book has not: give each the same sign it will take when you enter it in the cash book. Credits (interest, dividend, direct deposits) are added. Debits (charges, interest on overdraft, standing instructions, dishonoured cheques) are deducted.

The starting balance matters. If the pass book shows a credit balance (money in the bank), it is a favourable balance. If it shows a debit balance (an overdraft), write it as a negative figure and use the same signs for every item. Always read the question for the words "balance as per pass book" and "overdraft" before you begin.

Key rules to remember

Favourable pass book balance: items to add: Add: cheques deposited but not yet credited by the bank; interest, dividend or direct deposits credited by the bank but not yet entered in the cash book; A cheque you deposited is already in your cash book but not in the pass book, so the pass book figure is lower than your cash book and you add it. Credits made by the bank on its own increase your cash book once entered, so you add them too.
Favourable pass book balance: items to deduct: Deduct: cheques issued but not yet presented for payment; bank charges, interest on overdraft, standing instruction payments and dishonoured cheques debited by the bank but not yet entered in the cash book; A cheque you issued is already in your cash book but not in the pass book, so the pass book figure is higher than your cash book and you deduct it. Debits made by the bank reduce your cash book once entered, so you deduct them too.
Bank charges and direct items by the bank: Bank credits not in the cash book: add. Bank debits not in the cash book: deduct.; Use one test: what will this item do to the cash book when I enter it? If it raises the balance, add it. If it lowers the balance, deduct it.
Overdraft as per pass book: start negative: Overdraft as per pass book = a negative starting figure. Use the same add and deduct rules as above.; Do not flip any sign. Deducting a cheque issued makes the overdraft larger. Adding a cheque deposited makes it smaller.
Result: Balance as per cash book = Pass book balance ± reconciling items; For an overdraft, the result is an overdraft as per the cash book if the final figure is negative. If it turns positive, it is a favourable balance.

How to solve Preparing BRS Starting from Pass Book Balance questions

Use the same routine on every question. Decide the starting balance type first, then treat each item one by one.

1Write the heading: Bank Reconciliation Statement as on (date). Then the first line: Balance as per Pass Book, marked as credit (favourable) or overdraft.
2Read the question and list every item that differs between cash book and pass book. Ignore items that appear in both.
3Classify each item into one of two groups: the bank has not yet recorded it (cheques issued not presented, cheques deposited not collected), or the bank has recorded it and the cash book has not (charges, interest, direct deposits, dishonours).
4For a favourable balance, add cheques deposited not credited and bank credits not in the cash book. Deduct cheques issued not presented and bank charges or other debits not in the cash book.
5For an overdraft, write the opening balance as a negative figure and use the same signs as in step 4. Do not reverse them.
6Total the additions and deductions and reach the balance as per cash book.
7Check by verifying with the cash book balance given in the question, or by working it through from the cash book side. If they differ, recheck the direction of each item.
8State the final answer clearly: Balance as per Cash Book, with the word overdraft where it applies.

Quickest way: The effect-on-cash-book check

When to use it: Use this when you are short of time or unsure about the sign of an item.

First ask: is the item already in my cash book, or is it only in the pass book?
If it is only in the pass book, ask what it will do to the cash book when entered. Charges reduce the cash book, so deduct them. Interest increases it, so add it.
If it is already in the cash book but not in the pass book, the cash book has moved and the bank has not. A cheque issued has already reduced the cash book, so the pass book figure is higher: deduct it. A cheque deposited has already raised the cash book, so the pass book figure is lower: add it.
For overdraft questions, apply the same logic with the starting figure written as negative.

Common mistakes in Preparing BRS Starting from Pass Book Balance

Using the cash book rules for adding and deducting without reversing the cheque items.
Students memorise one set of rules and apply it when starting from the cash book as well as from the pass book.
Fix: Remember that the rules for cheques issued and cheques deposited are exactly opposite when you start from the pass book. Before you begin, note down the starting point and the direction of the walk.
Treating an overdraft as a favourable balance, or flipping every sign for an overdraft.
The question says "balance as per pass book" with a debit figure, and students either skip the word overdraft or think all signs must reverse.
Fix: Underline overdraft in the question. Write the opening figure as negative, use the same signs as for a favourable balance, and state the final answer as overdraft if it remains negative.
Including items that appear in both books.
Students feel they must use every number in the question.
Fix: Only include items that appear in one record and not in the other. Anything recorded on both sides needs no adjustment.
Putting bank charges in the wrong direction.
Students remember that charges are added in some BRS questions and copy the rule without checking the starting point.
Fix: Bank charges and other debits not in the cash book will reduce it once entered, so deduct them from a favourable pass book balance. Bank credits such as interest will increase it, so add them.
Not mentioning the final balance as per the cash book with the correct label.
Students stop after totalling and forget to name the result.
Fix: Write "Balance as per Cash Book" on the last line and add "(overdraft)" where appropriate.

Worked examples

Example 1

On 31 March, the pass book of Sharma Traders shows a credit balance of ₹48,000. The following differences are found: (i) cheques issued for ₹9,000 have not been presented for payment; (ii) cheques deposited for ₹12,000 have not yet been credited by the bank; (iii) bank charges of ₹300 are in the pass book but not in the cash book; (iv) interest of ₹1,500 credited by the bank is not in the cash book. Prepare a BRS to find the balance as per cash book.

Show the solution

Start: Balance as per pass book (credit) = ₹48,000.
Deduct cheques issued but not presented: −₹9,000. Running total = ₹39,000.
Add cheques deposited but not credited: +₹12,000. Running total = ₹51,000.
Add interest credited by the bank, not in the cash book: +₹1,500. Running total = ₹52,500.
Deduct bank charges not entered in the cash book: −₹300. Running total = ₹52,200.

Answer: Balance as per cash book = ₹52,200 (debit, that is, favourable).

Example 2

The pass book of Mehta & Co. on 31 December shows an overdraft of ₹25,000. The differences are: (i) cheques issued for ₹14,000 have not been presented; (ii) cheques deposited for ₹20,000 have not been credited by the bank; (iii) a customer paid ₹4,000 directly into the bank, not entered in the cash book; (iv) bank charges of ₹500 are not entered in the cash book. Find the balance as per cash book.

Show the solution

Start: Overdraft as per pass book = −₹25,000 (treat as negative).
Cheques issued but not presented are deducted: −₹14,000. Running total = −₹39,000.
Cheques deposited but not credited are added: +₹20,000. Running total = −₹19,000.
Direct deposit by the customer, not in the cash book, is a bank credit and is added: +₹4,000. Running total = −₹15,000.
Bank charges not in the cash book are a bank debit and are deducted: −₹500. Running total = −₹15,500.

Answer: Balance as per cash book = overdraft of ₹15,500.

Exam tips

Write the heading and starting line first. Many marks go for correct format, even if a figure slips.
Circle the words "overdraft", "credit balance" and "as per pass book" in the question before you read anything else.
Show the sign logic in a short note beside each item, for example "cheque not presented, deducted". It helps the examiner give method marks.
In the written paper, finish with a one-line verification: say the result agrees with the cash book balance, if the question gives it.
Practise one favourable and one overdraft sum back to back so that working with a negative starting figure becomes automatic.

Practice questions from Bank Reconciliation Statement

Preparing BRS Starting from Pass Book Balance in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CA FoundationPreparing BRS Starting from Pass Book Balance

Preparing BRS Starting from Pass Book Balance: frequently asked questions

What is the difference between BRS from cash book and pass book balance?

The items are the same. The cheque items reverse direction, because you now walk from the bank's figure to yours. Items the bank has recorded take the sign they will have when you enter them in the cash book.

How do you treat an overdraft as per pass book in a BRS?

Treat the overdraft as a negative starting figure and use the same add and deduct rules as for a favourable balance. Do not flip any sign. State the result as an overdraft if it stays negative.

Do I add or deduct cheques issued but not presented?

With a favourable pass book balance, you deduct them. Your cash book has already reduced for them, but the bank has not. With an overdraft, you also deduct them, which makes the negative figure larger.

Can I solve a BRS without memorising rules?

Yes. For bank items, ask whether the item would increase or decrease the cash book when you enter it, and use the same sign. For cheques, ask which book has already recorded the cheque, then adjust the pass book figure to match your cash book. This logic works for both favourable and overdraft cases.