Hello, students, let us go for the fresh chapter called as Bank Reconciliation Statement. Now what is reconciliation in this chapter, reconciliation means comparison. So let us go for the first module of this chapter. So we have to compare cash book and pass book in this chapter.
Now they are saying all banking transactions are recorded by businessmen in cash book (bank column). I repeat we have to record it in cash book (bank column). Now what is cash book (bank column), so let us try to understand cash book (bank column) is nothing but a bank account as seen in cash book double column or it is as seen in cash book triple column. So please recollect what is the format of cash book. So let us go for the format of double column cash book. We have cash and bank column on each of the sides that is debit and credit. So now here they are saying we have to refer only bank column in this chapter. That itself means we will not refer the cash column in this chapter. So we don’t want this cash column, let us cut this cash column out and we will think only about bank column. So now bank column, debit side will be this receipts side, on this receipts side in the cash book maintained by businessman, debit side is receipts in cheque. So we have to record receipts in cheque here and on this payment side we will record the cheques issued by the businessman, on credit side payments in cheque we have to record. Now let us go for the next, they are saying bank column is nothing but a bank account in our books. So this is the cash book bank column, we have debit and credit side, so this is only bank column. So please keep this in mind. So now debit side is receipt side, now receipt side we record all the cheques received so this will increase the bank balance. So therefore we give plus sign here because balance is increasing. Now on credit side this is payment side, so on payment side we write all cheques issued by the businessman that is on credit side we will record and this will decrease the bank balance so we assign minus sign here. So this is the cash book. Now let us try to understand all such banking transactions which businessmen record in cash book these are recorded by banks in passbook. Now the question is what is passbook, but. So let us try to understand what is passbook. Passbook is nothing but customer’s account as maintained by bank in which customers hold their account. So this is customer account maintained by bank. Now pass book is nothing but a copy of our account in the books of the bank. This is the passbook but now please keep in mind, passbook debit side is withdrawal side which is completely opposite to cash book debit side. So withdrawal side here will record all cheques issued by bank on behalf of customer will record this on debit side and this will decrease bank balance and here we will assign minus sign because balance is decreasing.
Now passbook credit side is deposits again which is totally opposite to cashbook credit side, so all cheques received by the banks on behalf of customer are recorded on credit side and this will increase the bank balance so we will have to assign plus sign here.
Now we have seen what is cash book and passbook, let us compare these two books. So this is the cash book with bank column and this is the passbook. So now cash book debit side is receipts side, here bank balance is increasing, where bank balance increases in passbook so it will be on credit side. So we are comparing cash book debit with passbook credit where bank balance has increased. Now all such transactions whatever are recorded in cash book debit side by businessman same transactions are recorded by bank in passbook credit side. So we are comparing this.
Let us move ahead, now cash book credit side is withdrawal side that is payment side bank balance decreases here so it will be compared with passbook debit side. Now, it is withdrawal side here also bank balance decreases so whatever is recorded in cash book credit by the businessman same transactions are recorded in passbook on debit side.
So let us go for the next now. This is our module we have to give MCQs on this module. So please pause your video and read out these instructions, we have to solve MCQs now.
Let us go for the first MCQ, a bank statement is a copy….we will be getting four alternatives. So the correct alternative is, bank statement is a copy of customer’s account in bank.
Now second one, if bank balance decrease it will be recorded in…. So it will be recorded on which of this side, so the correct answer is it will be recorded in cash book credit side.
Let us go for third question, now all banking transactions are recorded in passbook by…. Who records this banking transaction in passbook, the correct answer is (c) that is banker records transaction in passbook.
Now the fourth one, for reconciliation we require cash book…., which column we require for reconciliation so that is cash book, bank column so that is answer (a).
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