Cash book and passbook difference
Reasons for Difference in Cash Book and Pass BookTopics: Literature. In other words we can say that always opposite entry in cash book and pass book. The bank pass book indicates the amount paid into the bank and the amount withdrawn there form. The pass book balance or any given data must be the same as the balance shown by the bank column of the cash book on the same date. The reason responsible for the difference may e delay in intimation, time gap between recordings of transaction in cash book and pass book due to errors and omissions in cash book and pass book. The cheque issued can be presented for payment to the bank within six month from the date of cheque as per banking law.
Reasons for Difference in Cash Book and Pass Book
A PassBook is a book which the bank issues to the account holder for the purpose of recording such transactions. Let us understand the Features of BRS in detail. An individual or a firm records the deposits into a Bank account on the debit side of the Bank column in the Cashbook and withdrawals on the credit side of the Bank column in the Cashbook. Similarly, the bank also records these transactions in its books. However, bank records the deposits by a customer on the credit side and withdrawals on the debit side in its books. What is the need for a Bank Reconciliation Statement?
There are end number of transactions occur in the normal course of business, where in receipt or payment is made in cash or cheque. To record these transactions the entity uses cash book and contains all the details of the receipts and disbursements that are recorded chronologically. Many times cash book is juxtaposed with Passbook, but there is a slight difference in the two. With the help of pass book, banks inform their customer about the status of their account. There are a few differences between cash book and pass book which are discussed in this article in detail, have a look.
There is a slight difference between cash book and passbook, that is cash book keeps a record of cash transactions whereas passbook is.
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Key Differences Between Cash book and Passbook
Ans : A bank reconciliation statement is prepared for finding out the causes for the difference between the balances of a cash book and passbook, and to reconcile their balance. Ans : Overdraft means the amount overdrawn from the bank. Ans : Minus balance indicates a financially unsound position of the firm, where the bank has paid more on our account than what we have deposited into the bank. Will the preparation of Bank Reconciliation Statement rectify the errors that have crept into the Passbook or Cash Book? What will be the effect of the interest charged by the bank if there is an overdraft balance? Ans : The bank will debit the amount of interest to our account, and thus our bank balance will decrease as per the passbook or the amount of loan or overdraft will increase. Name four items that are written in the minus column while starting with debit balance of cash book.