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CA Foundation · Accounting · Bank Reconciliation Statement

Starting from the cash book balance, a cheque of ₹4,500 issued to a supplier was recorded in the cash book but has not been presented to the bank. In the BRS, how is it treated if the cash book shows a favourable balance?

It is added to the favourable cash book balance. The firm has already recorded the payment, but the bank has not yet paid the cheque, so the pass book balance stays higher by ₹4,500 until the cheque is presented.

  1. AAdded to the cash book balanceCorrect
  2. BDeducted from the cash book balance
  3. CIgnored, as it needs no adjustment
  4. DDeducted after treating it as a bank charge

Explanation

The cash book has already reduced the balance by ₹4,500, but the bank has not yet paid, so the pass book balance is ₹4,500 higher. It is added to the cash book balance to reach the pass book balance. Deducting it would be a sign error.

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