Bank Reconciliation Statement
Class 11 · Accountancy
4 ideas in Class 11 Accountancy, explained in plain words, with games and quizzes to practise.
Need for BRS
Part of: Meaning and Causes
Passbook copies bank records; cash book copies firm records; balances should tally; BRS reconciles gaps on a date without changing books.
Why it matters. Gaps explained. Frauds caught.
Key words
- BRS meaning
- : The statement reconciling cash book and passbook balances on a date.
- Two balances differ
- : Timing, bank-only items and errors that split the two balances.
- Reconciliation work
- : Comparing both books to list items causing the gap.
Try it in two minutes
- Compare both balances.
- List unmatched items.
- Reconcile the date.
Try at home. Match own passbook.
Causes of Difference
Part of: Meaning and Causes
Unpresented cheques lag; uncredited deposits lag; bank charges, interest, direct deposits appear first in one book; errors on either side differ.
Why it matters. Each cause adjusts. Direction matters.
Key words
- Timing gap
- : Cheques issued but still waiting at the bank for payment.
- Bank credits
- : Interest and collections the bank records before the firm does.
- Bank debits
- : Charges and dishonours the bank debits before the firm records.
- Recording errors
- : Wrong amounts or sides entered in either book by mistake.
Try it in two minutes
- Find unpresented cheques.
- Find uncredited deposits.
- Spot bank-only items.
Try at home. List bank-only charges.
BRS from Cash Balance
Part of: Preparing BRS
Start from cash book balance; add unpresented cheques and bank credits; subtract uncredited deposits and bank debits; reach passbook.
Why it matters. Direction decides sign. Sums agree.
Formulas
- Passbook = cash book + unpresented cheques + bank credits - uncredited deposits - bank debits.
- Start from the cash book balance and reach the passbook balance.
Key words
- Passbook
- : The copy of bank records showing deposits and withdrawals.
- Cash book
- : The firm record of its own bank deposits and payments.
- Unpresented cheque
- : Cheques issued but not yet presented for payment.
- Uncredited deposit
- : Deposits sent in but not yet credited by the bank.
Try it in two minutes
- Start cash balance.
- Add, subtract causes.
- Reach passbook.
Try at home. Reconcile sample figures.
Adjusted Cash and Overdrafts
Part of: Preparing BRS
Overdraft means owed to bank; favourable and overdraft need opposite signs; adjusted cash book first updates known items, then BRS takes timing only.
Why it matters. Overdraft flips logic. Steps simplify.
Formulas
- A debit cash balance is favourable; a credit cash balance is an overdraft.
- With an overdraft start, every BRS plus becomes a minus and vice versa.
Key words
- Bank overdraft
- : Excess withdrawals over deposits shown as a credit cash balance.
- Favourable balance
- : A debit balance meaning deposits exceed withdrawals.
- Unfavourable balance
- : A credit balance meaning withdrawals exceed deposits.
- BRS situations
- : The four starts: favourable or overdraft from cash or passbook side.
Try it in two minutes
- Check favourable or overdraft.
- Update known items first.
- Reconcile timing leftovers.
Try at home. Flip a BRS to overdraft.
What your child will practise
- Adjusted Cash and Overdrafts: Space Puzzle (Clue Puzzle)
- Adjusted Cash and Overdrafts: Space Quick Fire (Quick Fire)
- BRS from Cash Balance: Ocean Puzzle (Clue Puzzle)
- Causes of Difference: Space Quest (Flip and Match)
- Need for BRS: Candy Quick Fire (Quick Fire)
- Quiz: Adjusted Cash and Overdrafts (8 questions)
- Quiz: BRS from Cash Balance (8 questions)
- Quiz: Causes of Difference (8 questions)
- Quiz: Need for BRS (8 questions)