Bank Reconciliation Statement ( BRS ) explained with example in easy way | Class 11th | CA | B.Com
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- เผยแพร่เมื่อ 16 พ.ย. 2018
- Bank Reconciliation Statement (BRS)explained in easy way for the students as well as faculty. Class 11th, CA, B.com , CA foundation
To know about what is Bank Reconciliation statement, you guys should have some basic knowledge of two things which are Pass Book and Cash Book. Now as you guys are studying Accountancy instead of A, B, C, let me assume that you guys are grown enough to know what a pass book is. But still I know that there may be some people among you guys who doesn't know what a pass book is because in India still many families doesn't have a bank account. So, yeah for those who doesn't know, A pass book is the record of deposit and withdrawals of a person made with the bank. That is when you deposit money in the bank, it gets credited in your pass book and when you withdraw money out of your bank, it gets debited from your pass book. And this pass book is maintained by the Bank. Okay, so this is what a pass book is.
Now, the next thing is Bank Book which is also known as Cash Book and it is usually the Bank Column of the Cash Book. So, cash book or Bank book is usually studied before studying Bank Reconciliation statement. Therefore, most of you guys may already know about it. For those who don't, a cash book is a book in which receipt and payments of money are recorded. But unlike pass book, which is prepared by bank, cash book is prepared by the business. Now Cash Book has two column, one is Cash column and other is Bank column, but in bank Reconciliation Statement, we are only concerned with Bank column because Bank Reconciliation is only about those transactions which are related to Bank.
So, from this we can say that both Pass book and Cash book are the statements of receipts and payment but the only difference is that Pass Book is prepared by the bank but the Cash book is prepared by the customer of the bank i.e Business. Now, the thing is that most of the time the balance of pass book and the balance of cash book doesn't match, because of which we prepare Bank Reconciliation Statement. So, we can say that Bank Reconciliation statement is a statement which explains the difference among balances of a pass book and a cash book.
Now as i said sometimes pass book and cash book doesn't match, but the question is why? Let's understand
See, as I said Bank book is prepared by Bank which is usually correct and the cash book is prepared by the customer of the bank or the business which can commit errors, so sometimes because of the error committed by the business in recording the transactions in the bank column of the cash book, there comes a difference among the balances of cash book and pass book.
Another reason of mismatch is Difference in timing,
For example- When we deposit a cheque in the bank, we immediately Debit the cash book with the amount of cheque....but it takes time by the bank to deposit the cheque in the account and if we check the balance of pass book and bank book during such time, there will be a mismatch.
Yet another reason is No information regardibg the transaction... For example - When bank pays Interest, it credits the pass book but we do not know about such Interest until we check the pass book, so we do not record it in the Bank book which results in Mismatch.
Now, let's study how to prepare Bank Reconciliation statement which is also known as BRS with a problem.
So, here is our problem where it is stated Prepare Bank Reconciliation Statement of ABC Ltd. from the information given below.
Let's show you guys how to solve it.
Here is the format of Bank Reconciliation Statement, and I want to tell you guys that there is no standard format of BRS, so you guys can prepare it anyway, but this is still the best format according to me.
So, we always start with either the balance of cash book or the balance of pass book... It depends upon the problem. As you can see in this problem, we are given Balance as per Cash book, so will start with this.
Balance as per Cash Book Rs. 25,000
Before going to next step, you guys need to know what is the motive behind preparing Bank Reconciliation Statement. For example - Trading Account is prepared to know Gross profit i.e the end result of Trading account is either Gross profit or gross loss. Similarily end result of Profit and Loss Account is either Net Profit or Net Loss.
my exams r tomorrow and me searching for video 😆😅😅
Paagal 100% fail hoga Kal
Same😂
Well explained the concept of Bank Reconciliation Statement. Keep it up.
Thank you.
Statement 2 Solution is wrong
Thanks a lot very simple explanation and less time required to understand
😊
Very well explained sr the concept of BRS
Well explained, I am currently working as an accountant, I do the same process 👍👍👍👍
Best of luck
@@rajasreekundu1948 Thank you so much 🙏🏾🙏🏾🙏🏾🙏🏾
Well done,a very good accounting tutorials
Though you look like a student,you teach like a professional accounting teacher,well done
Thank You 🙂
Good explanation, thank sir
Well explained theory of BRS statement as off now i have seen 👍
After ur explanation brs is now very easy to understand
Nice.
I really like your explanation and presentation.. If you may please do an adjustment of trial balance.
Thank you.
Well explained
Thanks a lot. This was a good way to. Make us understand . 😄
,🙏🙏
If it is not mentioned regarding the balance wether it is credit or debit pass book and for cash book both then What are we supposed to assume it as ?
Weelll explained🎉👍👍
Thanks a lot 🙏💕
Bro in 7th point he told that entered twicw in cash book its ok but why did u add in pass book an amount of rs 2000. Thats my point plzz explain..
Good Explanation
Bank interest 795 recorded twice in the cash booK sir ye kay hoga plx boliye
Super bro nice explanation can make video on cash flow statement with example
Nice explanation
Thanks brother for helping
Happy to help.
Thanks sir
Please provide link for direct expenses and indirect expenses
cash book and pass book/ bank book, passbook and bankbook is same, cashbook is maintained by company employees. and bankbook/passbook is maintained by banks
Can you please assist me with conveyancer and correspondent transactions
So we should add 500 rupess because, in passbook we have only recorded 2000 and in cash book we have recorded 2500. Hence, the balance of passbook is less then cashbook. So since we started with balance as per cash book, we are going to arrive at balance as per pass book.
Thats why we added 500 extra, because pass book had recorded less money.
Really hats off to you sir I'm very interested in your video I liked ur teaching style and video presentation
Thank you.
Thank u so much sir for this
It was full explanation of BRS & also best video in very easy language 😀😀
Once more
thank u so much sir for this great video
Thank you.
Can you post few more examples if possible
Dear Sir, Can you tell me how to create this vedio like this ?
He used PowerPoint.
Thank you dear
😊
my doubt is in practical life to which amount do we reconcile as base the cash book balance or passbook balance??
Pass book
It pass book balance bro
Don't you think that in 1st entry we should less 500 because its already recorded as 2500 in cash book while the actual amount with drawl was 2000. So look into this...
Ri8
Sir Ratio analysis video plzzz
Thank you.
For "Withdrawn 2000 from Bank but recorded 2500 in cash book"
This essentially mean, recorded 500 extra in the cash book and for reconciliation, the amount needs to be taken out and not added. Please suggest, What I am calculating wrong
If we are starting with Balance as per cash book, then 500 has to be deducted, but if we are starting with Balance as per Bank book, then 500 is to be added.
Yeah you have started balance as per cash book then you have added instead of deducting 500 in 2nd transaction
@@karthiksure456 Oh yes, I just noticed. I feel silly now. 😔
@@CALavishGupta thanks nothing wrong......its quite common .....👍🏼👍🏼👍🏼
@@CALavishGupta plz upload new videos
sir i think pass book are maintained by account holder and cash book are maintained by bank please analyse it and tell us once again
!
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Ye to taati hai pr bhai tune bhot bdiya smjhaya ye subject hi bekar h
Op bhai
Ohhhhhhhhhh
Tareef samju ya beizzati?
@@CALavishGupta bhai taareef kr rha hu isme kya kr skte h ki subject hi bekar h aapne to pura effort dikhaaya
Not good
Okay bro