On 31st July, 2026, Cash Book of Ms. Daman (Bank Column of Account No. 1) shows a Bank Overdraft of ₹ 1,97,400. On going through the Bank Pass book…

CA Foundation · Accounting · MTP · September 2026
On 31st July, 2026, Cash Book of Ms. Daman (Bank Column of Account No. 1) shows a Bank Overdraft of ₹ 1,97,400. On going through the Bank Pass book for reconciling the Balance, she found the following: (a) Out of cheques drawn on 26th July, those for ₹ 14,800 were cashed by the bankers on 2nd August. (b) A crossed cheque for ₹ 3000 given to Abdul was returned by him and a bearer cheque was issued to him in lieu on 1st August. (c) Cash and cheques amounting to ₹ 13,600 were deposited in the Bank on 29th July, but cheques worth ₹ 5,200 were cleared by the Bank on 1st August., and one cheque for ₹ 1,000 was returned by them as dishonoured on the latter date. (d) According to Daman's standing instructions, the bankers have on 30th July, paid ₹ 1,280 as interest to her creditors, paid quarterly premium on her policy amounting to ₹ 640 and have paid a second call of ₹ 2,400 on shares held by her and lodged with the bankers for safe custody. They have also received ₹ 600 as dividend on her shares and recovered an Insurance Claim of ₹ 3,200, as their charges and commission charged on the above being ₹ 400. On receipt of information of the above transaction, she has passed necessary entries in her Cash Book on 1st August. (e) Bankers seem to have given a wrong credit for ₹ 2,000 paid in by her in No. 2 account and wrong debit in respect of a cheque for ₹ 1,400 drawn against her No. 2 account. Prepare a Bank Reconciliation Statement as on 31st July, 2026.

Suggested Answer and Working Notes:

Bank Reconciliation Statement of Ms. Daman ₹ ₹ ₹ Balance as per Cash Book (1,97,400) Add: Cheques issued but not presented for payment 14,800 Crossed Cheque issued to Abdul not presented for payment 3,000 Amounts collected by Bank on our behalf but not entered in the Cash Book Dividend 600 Insurance claim 3,200 3,800 (-) Bank Commission (400) 3,400 Amount paid in A/c No. 2 credited by the Bank wrongly to this A/c 2,000 23,200 (1,74,200) Less: Cheques deposited in the bank but no cleared (₹ 5,200 + ₹ 1,000) 6,200 Payments made by Bank on our behalf but not entered in the Cash Book Interest 1,280 Premium 640 Second call 2,400 4,320 Cheques issued against A/c No. 2 but wrongly debited by the Bank to this A/c 1,400 (11,920) Overdraft as per Pass Book 1,86,120

Topics: Bank Reconciliation Statement

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