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1. Bank reconciliation is a process explain the difference between the cash book balance
with bank statement.
3. The factor or the reason why cash book balance are differ with bank statement due to
several reason. The reason are:
ITEM EXPLAINATION
1. Unpresented cheques Those cheque has been paid by company and recorded
in the cash book but the transaction doesn’t appear in
bank statement yet.
2. Uncredited deposit Cash or cheque deposit received by the company.
Already recorded in cash book but doesn’t recorded yet
in bank statement.
3. Bank charges Such as bank charges,cheque book charges, service
charge. The charges recorded in bank statement but not
in the business’s cash book.
4. Bank or credit transfer Cash deposit or cheques received behalf of the business
by the bank. This transactions will recorded in bank
statement but doesn’t appear in cash book of the
business.
5. Standing orders Payment instructions given by the business to the bank
for certain times. This transactions will recorded in
bank statement but not in the cash book.
6. Dishounor cheque Cheque issued by the business has been return back to
the business as a technical error in the cheque details.
Cheque return is doesn’t mean cheque bounce.
7. Technical error It can be classified into two types, errors in cash book
or error in bank statement.
Error in cash books occur when the bookeeper has
made a mistake such as wrongly recorded the amount.
The error mostly happen in the cash book
Error in bank statement seldom happen but it can be
happen due to technical problem from the bank.
BANK RECONCILIATION FORMAT (WITHOUT ADJUSTING CASH BOOK)
RM RM
BALANCE IN CASH BOOK XXX
Add (+) :
UNPRESENTED CHEQUES XXX
DIVIDEND FROM INVESTMENT XXX (+)
CREDIT TRANSFER XXX
TECHNICAL ERROR
(OVERSTATE CASH OUTFLOW /UNDERSTATE CASH INFOW) XXX XXX
XXX
Less (-) :
UNCREDITED CHEQUES XXX
BANK CHARGES XXX
DISHONOUR CHEQUE XXX
(-)
PAYMENT MADE BY BANK XXX
STANDING ORDER XXX
TECHNICAL ERROR
(UNDERSTATE CASH OUTFLOW / OVERSTATE CASH INFLOW) XXX (XXX)
BALANCE AS PER BANK STATEMENT XXX
Cash Book
RM RM
Bal b/d XXX BANK CHARGES XXX
DIVIDEND FROM INVESTMENT XXX DISHONOUR CHEQUE XXX
TECHNICAL ERROR TECHNICAL ERROR XXX
(OVERSTATE CASH OUTFLOW XXX (UNDERSTATE CASH OUTFLOW /
/UNDERSTATE CASH INFOW) OVERSTATE CASH INFLOW)
CREDIT TRANSFER XXX STANDING ORDER XXX
BAL C/D aaa
1.) Zamil Enterprise bank statement for May 2013 shown difference amount with company
cash book for that month. The following are cash book and bank statement May 2013
Bank Statement
Additional Information:
ii.) Cheque received from Liew on 30 Mei 2013 has been declared as dishonour cheque
Example 2
Cash Book of Jill Jewel showed debit balance of RM 14,800 on 30th June 2016. The bank
statement for the month of June 2016 showed a credit balance RM 20,800. After a while the,
there is few transaction that not been recorded in Bank Statement and cash book. There are: