Class 11 Accountancy - BIHAR
Bank Reconciliation Statement
The chapter 'Bank Reconciliation Statement' (BRS) in Class 11 Accountancy teaches students how to match the cash book bank balance with the passbook balance provided by the bank. Often, these two balances do not match due to timing differences like cheques issued but not yet presented, or bank charges debited by the bank. For Bihar (BSEB) board exam students, mastering this chapter is crucial as it carries significant weightage, frequently appearing as a practical 6-mark or 8-mark numerical question requiring you to prepare a statement showing items causing disagreement.
Start Learning FreeKey Concepts
Cash Book
A book maintained by the business to record all cash and bank transactions from the perspective of the business owner.
Passbook
A copy of the customer's account maintained by the bank, showing all deposits and withdrawals from the bank's perspective.
Cheques Issued but not yet Presented for Payment
Cheques written and recorded in the cash book by the business, but not yet cleared or presented at the bank, causing the cash book balance to be temporarily lower than the passbook.
Direct Deposit by Customers
Payments made directly into the bank account by debtors, which appear in the passbook first and increase the bank balance before being recorded in the cash book.
Bank Charges and Interest
Fees deducted or interest allowed directly by the bank, which are recorded in the passbook first and create a difference until entered in the cash book.
Important Formulas
Board Exam Info
In the Bihar School Examination Board (BSEB) Class 11 Accountancy annual examination, this chapter typically carries around 6 to 10 marks. Questions usually consist of one short objective question (1-2 marks) and one major long-answer practical problem where students are asked to prepare a Bank Reconciliation Statement given either a favorable or an unfavorable (overdraft) balance.
Frequently Asked Questions
Why do the Cash Book and Passbook balances differ?
They differ mainly due to timing differences in recording transactions, such as cheques deposited but not yet cleared, cheques issued but not presented, bank charges, and direct deposits by customers.
What is a Bank Overdraft?
An overdraft is a facility where a customer is allowed by the bank to withdraw more money than the actual balance available in their account, resulting in a negative or credit balance in the cash book.
If we start with the balance as per Cash Book, what treatment is given to cheques deposited into the bank but not yet collected?
They are subtracted (minus items) from the cash book balance because they were already added to the cash book when deposited, but haven't yet increased the passbook balance.
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