difference between cash book & pass

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Q1 difference between cash book & pass

book balance
Bank reconciliation means some of the

transaction entered in the cash book not in

the pass book and some transaction

entered in the pass book not in the cash

book. 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withdrawn there form.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

be 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.
Reasons of difference between cash book &

pass book balance:
>Cheque issued but not presented for

payment: When cheque are issued then

immediately make entry in the cash book.

The cheque issued can be presented for

payment to the bank within six month from

the date of cheque as per banking law. The

cheque are presented for payment after the

expiry of the above period then payment is

refused by the bank. This cheque is also

known as stale cheque. It is posssible at the

time when the balance of the two books are

being compared, thus more chances of

causing a disagreement b/w the two

balances.
>Cheque paid into the bank but not yet

cleared: As soon as the cheque are

deposited into the bank, the immediately

entry is passed in the cash book. This will

make entry in pass book only when cheque

are cleared. It is posssible at the time when

the balance of the two books are being

compared, thus more chances of causing a

disagreement b/w the two balances.
>Interst allowed by the bank: Bank might

have credited the account of the customer

with the interest and may have made the

entry in the pass book. It is possible that the

entry of such interest may not have been

made by the customer in the cash book,

thus causing a disagreement b/w the two

balances.
>Interest and Bank charges debited by

bank: Sometime bank charges interest from

the customer then immediately entry in the

pass book but not in cash book. so, in this

case when check the balance b/w cash and

bank book then disagreement b/w the two

balances. So, it is the main reason to create

difference b/w two books.
>Interst, dividend collected by the bank:

sometime interest on government security

or dividend on share is collected by the

bank and is credited to customer account. If

the entry does not appear in the cash book

then balance will differ.
>Direct payment by bank: Sometimes,

understanding instruction from the clients

certain payment like insurance premium,

club fees instalment etc. are made by the

bank. then this entry is recorded only in the

pass book. This entry is made in the cash

book only when the necessary intimation to

that effect is received from the bank by the

client. The entries in the cash and pass

book may be on different dates.
>Direct payment into the bank by a

customer: Sometimes, our customer

deposit money direct into the account in the

bank. It is only recorded in the pass book

not in the cash book. It is posssible at the

time when the balance of the two books are

being compared, thus more chances of

causing a disagreement b/w the two

balances.
>Dishonour of bill discounted with the bank:

Sometimes, customer get their bills

discounted with the bank. If the bank is not

able to get payment of these bills on the due

date. it will debit the customer account with

the amount of the bills together with the

nothing charges if any.The customer will

pass the entry in the cash book only. when

balance of the two books are being

compared, thus more chances of causing a

disagreement b/w the two...
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