Why the cash book and bank statement differ
Want to practise reconciliations on real entries? The Finance Executive Programme at Cokonet Academy covers accounting fundamentals, BRS, Tally Prime, Excel and Zoho Books.
Quick answer: Differences arise from timing (one side has recorded a transaction and the other has not yet), items only the bank knows about (charges, interest, direct deposits) and errors on either side.
- Cheques issued but not yet presented for payment
- Cheques deposited but not yet credited by the bank
- Bank charges and interest on overdraft debited by the bank
- Interest credited by the bank
- Direct deposits by customers through NEFT, RTGS or UPI
- Direct payments such as standing instructions, EMIs or ECS debits
- Dishonoured cheques and errors in the cash book or by the bank
Cash book vs passbook: debit and credit balances
Quick answer: A debit balance in the cash book (bank column) means money in the bank, and appears as a credit balance in the passbook. An overdraft is a credit balance in the cash book and a debit balance in the passbook.
This mirror effect confuses many students. Remember that the passbook is the bank's record of your account: your deposit is the bank's liability to you, so it is a credit in their books. Start every BRS by noting which balance you have and whether it is favourable or an overdraft.
Bank reconciliation statement format
Quick answer: Start with the balance as per one record, add items that make the other record higher, subtract items that make it lower, and arrive at the balance as per the other record.
| Particulars | Add (Rs) | Less (Rs) |
|---|
| Balance as per cash book (Dr) | xxx | |
| Add: cheques issued but not presented | xxx | |
| Add: interest credited by bank | xxx | |
| Add: direct deposits by customers | xxx | |
| Less: cheques deposited but not credited | | xxx |
| Less: bank charges debited | | xxx |
| Less: direct payments by bank | | xxx |
| Balance as per passbook (Cr) | xxx |
Bank reconciliation statement example
Quick answer: In this example, a cash book balance of Rs 1,25,000 reconciles to a passbook balance of Rs 1,39,250 after adding Rs 27,200 and subtracting Rs 12,950.
On 31 March, the cash book of a Thrissur trading firm shows a bank balance of Rs 1,25,000 (Dr). Comparing it with the bank statement:
- Cheques issued to suppliers but not presented: Rs 18,000
- Cheques deposited but not yet credited: Rs 12,500
- Bank charges debited, not in cash book: Rs 450
- Interest credited by the bank, not in cash book: Rs 1,200
- NEFT received from a customer, not in cash book: Rs 8,000
| Particulars | Add (Rs) | Less (Rs) |
|---|
| Balance as per cash book | 1,25,000 | |
| Add: cheques issued but not presented | 18,000 | |
| Add: interest credited by bank | 1,200 | |
| Add: NEFT received from customer | 8,000 | |
| Less: cheques deposited but not credited | | 12,500 |
| Less: bank charges | | 450 |
| Balance as per passbook | 1,39,250 |
Check: 1,25,000 + 18,000 + 1,200 + 8,000 = 1,52,200, and 1,52,200 - 12,500 - 450 = 1,39,250.
Adjusted cash book first, then BRS
Quick answer: In practice, accountants first update the cash book for items only the bank knows (charges, interest, direct deposits and payments, dishonoured cheques), then prepare a BRS showing only timing differences.
Using the example: adjusted cash book = 1,25,000 + 1,200 + 8,000 - 450 = Rs 1,33,750. The BRS then shows 1,33,750 + 18,000 - 12,500 = Rs 1,39,250, matching the passbook. Pass the journal entries for interest, charges and the NEFT receipt so the books are correct; the cheques in transit clear on their own next month.
Bank reconciliation in Tally Prime, Zoho Books and Excel
Quick answer: Tally Prime and Zoho Books match bank statement lines to book entries and show unreconciled items; Excel uses lookups or helper columns to flag matches. The logic is the same as the manual BRS.
- Tally Prime: open the bank ledger in Banking > Bank Reconciliation, enter or import the bank date for each cleared entry, and Tally shows the balance as per bank and the unreconciled amount.
- Zoho Books: connect bank feeds or import the statement, then match or categorise each transaction.
- Excel: paste both lists, create a key with amount and cheque number or date, flag matches with XLOOKUP or COUNTIFS, and summarise unmatched items with a pivot table; see our pivot tables guide.
You can browse every programme we run on the all courses page or start at the Cokonet Academy homepage. Want to practise BRS with a trainer? Book a free consultation or call +91 8075 400 500.
BRS in interviews and on the job
Quick answer: Interviewers ask what a BRS is, why differences arise, how to treat an overdraft and how you reconcile in Tally or Excel. On the job, a monthly BRS catches errors, fraud and missing receipts early.
Reconciling every month also makes GST and audit work smoother, because unmatched receipts often mean unrecorded sales. Our guides to the accounts executive job and accounting interview questions cover the rest of the skills employers test.
Why Cokonet Academy for finance and accounting training
Cokonet Academy is an NSDC partner training institute with campuses in Trivandrum and Kochi. Find us on Google: Cokonet Academy, Trivandrum and Cokonet Academy, Kochi.
- NSDC partner training institute with campuses in Trivandrum and Kochi, plus a Bengaluru centre and online-live batches
- 11,200+ successful placements and 50+ corporate hiring partners
- Expert trainers in SAP (FICO, MM, ABAP), AWS, Python with AI, Data Analytics and Power BI
- Placement support until you are hired, with mock interviews and resume reviews
The Finance Executive Programme connects accounting theory with the tools finance offices use every day: Tally Prime, Excel, Zoho Books, GST returns and UAE VAT, finished with a capstone project.
Course details
- Course: Finance Executive Programme, Cokonet Academy
- Duration: 160 hours over 4 months, in 2-hour sessions
- Mode: classroom in Trivandrum and Kochi, or online-live; English with Malayalam support
- Six modules: Accounting Fundamentals (40 hours), Tally Prime with GST (50), GST, Taxation, ESI and EPF through SLP (15), Microsoft Excel (20), UAE VAT (15) and Zoho Books (20), plus a final capstone project
- Certificates: three certifications (Tally, Excel and the Statutory Literacy Programme) and three Cokonet completion certificates (Accounting Fundamentals, UAE VAT and Zoho Books)
- Placement: mock interviews, resume support and placement assistance; roles are pathways, not a guarantee
Syllabus, batch dates and trainer profile: Finance Executive Programme in Kerala.
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