This is the statement prepared to reconcile the pass book (bank statement) balance and the cash book (bank column of three column cash book) balance when there is a difference between the two.
Some terms and definitions used in this topic 1. Bank Giro credit: An amount paid by some one direct into our bank account. 2. Direct debits: Where we give permission for an organization to collect amounts owing direct from our account. 3. Standing order: Instructions to our bank to pay specified amounts at given dates. 4. Dishonoured cheque: A cheque which is found to be worth nothing. 5. Un realized cheque: A cheque received from some one and deposited into the bank account but not cleared and credited. 6. Un presented cheques: The cheques issued to some one but not presented to the bank for collecting money.
Reasons for the difference between cash book (bank column) balance and the bank statement (pass book) balance. 1. Cheques issued but not presented to the bank for payment. 2. Cheques deposited but not collected and credited in the bank statement. 3. Bank charges recorded in the bank statement but not recorded in the cash book. 4. Direct deposits by a customer or debtor into the bank account not recorded in the cash book. 5. Payments made by the bank as per standing order, recorded in the bank statement but not recorded in the cash book. 6. Direct debits in the bank statement only.
Updated cash book The cash book written up to the last day of the month by including the entries which are in the bank statement but not in the cash book.