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BANK RECONCILIATION STATEMENT
What is a Bank Reconciliation Statement (BRS)?
A BRS is a statement prepared to reconcile the difference between the balance as per the bank column of the cash book and the balance as per the bank passbook/statement on a particular date.
What is the accounting entry when a bank directly pays a creditor through standing instruction?
Debit creditor account, credit bank account in cash book.
Why does a difference arise between the cash book balance and the passbook balance?
Differences arise due to timing differences such as unpresented cheques, uncredited cheques, bank charges not recorded in the cash book, or errors made by either the firm or the bank.
Which items are added to the cash book balance when preparing BRS from the cash book side?
Cheques issued but not presented, direct credits by bank.
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