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When reconciling the bank statement balance to the cash book balance, do you need to plus or minus cash received by the business, posted to the cash book, but not yet banked? (-) A) Minus (+) B) Plus
You need to add it in your bank or Pass book.
No.
The purpose is to reconcile the bank passbook and bank A/c. When something has not been entered in the bank a/c then there is no way it can be reflected in passbook.
In the present question the cash is received or paid only. Its not yet banked so it will not affect the BRS.
In the question it is mentioned " Reconciling the bank statement balance to the cash book balance".
Here, cash book balance does not means as Cash A/c. It refers to as Companies Bank A/c balance. Because Its the basic accounting way to talk about reconciliation between bank statement with companies bank a/c.
Bank statement is always reconciled with Companies Bank A/c not with Cash A/c.
Cash A/c is always reconciled with Cash in Hand.
Now we will return to the question, it furthur adds "cash received by the business, posted to the cash book, but not yet banked?"
As expalined above, cash book is bank a/c. And as per most of the companies policy, cash received in a day should be deposited within that day or definatly the next day. So, cash is received and passed a contra entry of cash deposited to bank a/c but not yet deposited to bank. Because its general tendency of accountants to retain cash received during the day and deposits it the next day.
Since, we are balancing bank statement to the cash book balance. Hence, we will B) Plus the amount to bank statement balance to level it to cash book balance i.e, bank a/c balance.
If business received cash or cheque and deposit into bank and after this posted in your cash book but not in your bank statement then you need to minus then your balance will be match with your bank statement.
If business paid cash or cheque and after this posted in your cash book but not in your bank statement then you need to plus then your balance will be match with your bank statement.
If you feel dificulty to reconcile this then send me data i will reconcile it for you. It's very interesting thing.
Plus to the bank statement
we should add
it is only a cash transaction which is not effecting bank account hence no need reflect in bank reconciliation statement
Dear ,,
Go study Accounting principle1 then start working as accountatnt.
regards
B.R.S is prepared at the end of a month, If an Accountant started the B.R.S with the balance amount shown in the Bank statement he has to add the amount of cash recorded in the cash book but not yet deposited.
Cash Book has three column on each Reciept and Payment sides of it. When there is any entry related to receipt or payment via cash, there is no need to involve bank in to it. It is, therefore, the cash received by the business is recorded on the receipt side of the cash book in cash column and there is no need to make any adjustment in the "Bank Reconciliation Statement".
Further, if the amount is deposited in to the bank, but bank statement does not show the effect of this entry. In this case, bank column of cash book will be adjusted.
For Example.
Cash/cheque received from customer and deposited into the bank on the same day.
a- Bank (Dr.) 20,000
A/R (Cr.) 20,000
this entry was recorded in the bank column of the receipt side of the cash book. If at the end of the monht this deposit was not shown in the bank statement.
Adjustment in the bank column of cash book will be made by passing the following entry.
b- Cash (Dr.) 20,000
Bank (Cr.) 20,000
Accordingly, at the time of reconciliation of bank statement this entry will show the negative impact in the bank column of cash book to reconcile the bank account balance.
plus or minus(means credit and debit for cash flow)they reconcile for the begining and ending transactions in terms of cash.If you have a accounts receivable and accounts payables you see the good flow for reconciling accounts
