Bank Reconciliation Statement Class 11: Causes, Format and Solved Problems

What Bank Reconciliation Statement is about

Weightage: This chapter is part of Unit 2, Accounting Process (Part A: Financial Accounting-I), which carries 44 of the 80 theory marks in the school annual exam together with Recording of Transactions - I, Recording of Transactions - II, Trial Balance and Rectification of Errors, Depreciation and Provisions and Reserves.Source: CBSE Accountancy (055) syllabus 2026-27, Class XI course structure, Unit 2 Accounting Process

Key concepts

Cash book, pass book and the need for reconciliation

NCERT section 5.1

• Cash book (bank column): kept by the firm. Deposits are on the debit side, withdrawals and cheques issued on the credit side. A debit balance is money in the bank (favourable); a credit balance is an overdraft.
• Pass book / bank statement: kept by the bank, a copy of the firm's account in the bank's books. To the bank, the depositor is a creditor, so deposits are credited and withdrawals debited. A credit balance is favourable; a debit balance is an overdraft.

So a favourable balance is Dr in the cash book and Cr in the pass book; an overdraft is Cr in the cash book and Dr in the pass book.

Need for a BRS:

• explains the reasons for the difference on a date;
• brings to light errors in either book, which can then be corrected;
• shows items the firm has not yet recorded (charges, interest, direct deposits), so the cash book can be updated;
• discourages fraud and misappropriation by the cashier;
• gives the true bank balance for the Balance Sheet.

Worked example

The cash book of a firm shows a credit balance of ₹15,000 in the bank column. What does it mean, and how would the same balance appear in the pass book if there were no differences?

Try it first, then show the solutionSolution

1. A credit balance in the bank column of the cash book is an overdraft
2. In the pass book an overdraft is a debit balance

Answer: An overdraft of ₹15,000; it would be a debit balance of ₹15,000 in the pass book.

Timing differences recorded first in the cash book

NCERT section 5.1.1

These are entered by the firm at once, but by the bank only later.

1. Cheques issued but not yet presented for payment: the cash book was reduced when the cheque was issued; the bank reduces the balance only when the payee presents it. So the pass book balance is higher by that amount.
2. Cheques deposited but not yet collected (credited): the cash book was increased on deposit; the bank credits the account only after clearing. So the pass book balance is lower.

These two items need no correction in the cash book; they will clear by themselves in a few days.

Worked example

On 31st March, cheques of ₹18,500 issued by the firm have not been presented and cheques of ₹12,400 deposited have not been collected. Which balance is higher and by how much, if there are no other differences?

Try it first, then show the solutionSolution

1. Cheques issued, not presented: pass book higher by ₹18,500
2. Cheques deposited, not collected: pass book lower by ₹12,400
3. Net: pass book higher by 18,500 − 12,400 = ₹6,100

Answer: The pass book balance is higher by ₹6,100.

Timing differences recorded first in the pass book

NCERT section 5.1.1

The bank records these first and the firm learns of them only from the pass book.

Item	Effect on pass book balance	Cash book needs
Bank charges, commission	Lower	Debit to Bank Charges A/c
Interest on overdraft	Lower (overdraft rises)	Interest A/c debited
Direct payments by the bank (insurance premium, loan EMI under standing instructions)	Lower	The expense debited
Interest or dividend collected and credited by the bank	Higher	Interest/Dividend A/c credited
Direct deposit by a customer into the bank	Higher	Debtor credited
Cheque deposited earlier and dishonoured	Lower	Debtor debited again

All of these must eventually be recorded in the cash book by the firm. They are the items that are corrected when an amended (adjusted) cash book is prepared.

Worked example

The bank collects a dividend of ₹1,240 and debits bank charges of ₹350 on the last day of the month. The firm has not recorded either. By how much do the balances differ because of these two items?

Try it first, then show the solutionSolution

1. Dividend raises the pass book balance by ₹1,240
2. Charges lower it by ₹350
3. Net effect: pass book higher by ₹890

Answer: The pass book balance is ₹890 higher.

Differences caused by errors

NCERT section 5.1.2

Errors by the firm (in the cash book): a cheque entered with the wrong amount, a receipt entered in the cash column instead of the bank column, a wrong total (undercasting or overcasting), an item omitted, a balance brought forward wrongly.

Errors by the bank (in the pass book): a cheque credited or debited to the wrong customer's account, a deposit recorded at the wrong amount, wrong totalling.

To treat an error, ask two questions: which book is wrong, and is its balance overstated or understated? If you start from the cash book and the cash book balance is overstated, deduct the excess; if the pass book is overstated, add the excess to reach it.

Examples (starting from the cash book):

• Payment side of the bank column undercast by ₹500: cash book balance is ₹500 too high: less ₹500.
• Cheque issued for ₹3,860 entered as ₹3,680: cash book balance ₹180 too high: less ₹180.
• Bank wrongly debits ₹600 of another customer's cheque to us: pass book ₹600 too low: less ₹600.

Worked example

Starting from the cash book, how is each treated: (a) receipts side of the bank column overcast by ₹1,000; (b) a deposit of ₹2,400 entered in the cash column instead of the bank column?

Try it first, then show the solutionSolution

1. (a) Cash book bank balance is ₹1,000 too high: less ₹1,000
2. (b) The bank has the deposit but the bank column does not: pass book higher, so add ₹2,400

Answer: (a) Less ₹1,000; (b) add ₹2,400.

Preparing the BRS with a favourable balance

NCERT section 5.2.1(a)

Steps when starting from the cash book (debit balance):
1. Write the cash book balance in the plus column.
2. Add items that make the pass book higher: cheques issued but not presented, direct deposits, interest or dividend credited by the bank, errors that understate the cash book or overstate the pass book.
3. Less items that make the pass book lower: cheques deposited but not collected, bank charges, direct payments by the bank, dishonoured cheques, errors that overstate the cash book or understate the pass book.
4. Plus total minus minus total = balance as per pass book.

Starting from the pass book, every item takes the opposite sign.

Bank Reconciliation Statement of Kriti Traders as at 31st March 2026

Particulars	Plus items (₹)	Minus items (₹)
Balance as per Cash Book (Dr, favourable)	48,600
Add:
Cheques issued but not yet presented for payment	18,500
Interest credited by the bank, not in the cash book	1,240
Amount deposited directly by a customer into the bank	7,500
Less:
Cheques deposited but not yet credited (collected) by the bank		12,400
Bank charges debited in the pass book only		350
Insurance premium paid by the bank under standing instructions		4,800
Cheque deposited earlier, dishonoured; not yet recorded in the cash book		3,000
	75,840	20,550
Balance as per Pass Book (Cr, favourable) (plus total − minus total)	55,290

Worked example

For Kriti Traders, the cash book shows ₹48,600 (Dr) and the pass book ₹55,290 (Cr). Starting from the pass book instead, how is the cheque of ₹18,500 issued but not presented treated?

Try it first, then show the solutionSolution

1. The pass book does not yet show this payment, so it is higher than the cash book
2. To move from the pass book to the cash book, deduct ₹18,500

Answer: Less ₹18,500 (the opposite of its treatment when starting from the cash book).

Preparing the BRS with an overdraft

NCERT section 5.2.1(b)

An overdraft is a negative balance, so think of it as "money owed to the bank".

• An overdraft as per cash book (credit balance) or as per pass book (debit balance) is written in the minus column.
• The items are treated exactly as before: an item that raises the other book's balance is added, one that lowers it is deducted. Raising a balance means reducing the overdraft.
• If the final figure is negative, it is an overdraft as per the other book.

For example, cheques deposited but not yet credited: the cash book overdraft is smaller than the pass book overdraft. Starting from the pass book overdraft, you add them (the cash book is "better off" by that amount).

Bank Reconciliation Statement of Om Enterprises as at 30th June 2026

Particulars	Plus items (₹)	Minus items (₹)
Overdraft as per Pass Book (Dr)		25,250
Add:
Cheques deposited but not cleared	14,000
Interest on overdraft charged by the bank	1,100
Bank charges	150
Less:
Cheques issued but not presented		9,000
Direct deposit by a customer		6,000
	15,250	40,250
Overdraft as per Cash Book (Cr) (minus total − plus total)		25,000

Worked example

The pass book shows an overdraft of ₹25,250. Interest on overdraft of ₹1,100 has not been entered in the cash book. Starting from the pass book, is it added or deducted?

Try it first, then show the solutionSolution

1. Interest makes the pass book overdraft bigger (balance lower) than the cash book
2. Moving to the cash book, the overdraft should become smaller: add ₹1,100

Answer: Added (in the plus column).

Amended cash book method

NCERT section 5.2

When a question asks for an amended (adjusted) cash book first, work in two stages.

Stage 1: amend the cash book for every item the firm should record but has not: bank charges, interest debited or credited, direct deposits and direct payments, dishonoured cheques, and the firm's own errors. The corrected balance is the true bank balance, shown in the Balance Sheet.

Amended Cash Book (bank column) of Kriti Traders

Dr: Particulars	₹	Cr: Particulars	₹
To Balance b/d (unadjusted)	48,600	By Bank Charges A/c	350
To Interest A/c	1,240	By Insurance Premium A/c	4,800
To Customer (direct deposit)	7,500	By Debtor (cheque dishonoured)	3,000
		By Balance c/d (adjusted)	49,190
Total	57,340	Total	57,340

Stage 2: prepare the BRS starting from the amended balance. Only items the bank has not yet recorded remain: cheques not yet presented, cheques not yet collected, and the bank's own errors.

Bank Reconciliation Statement (after amending the cash book)

Particulars	Plus items (₹)	Minus items (₹)
Balance as per Cash Book (Dr, favourable)	49,190
Add:
Cheques issued but not yet presented	18,500
Less:
Cheques deposited but not yet credited		12,400
	67,690	12,400
Balance as per Pass Book (Cr, favourable) (plus total − minus total)	55,290

The pass book balance is the same as in the one-stage statement, which is a good check.

Worked example

Which of these are shown in the amended cash book: (a) cheque issued not presented; (b) bank charges; (c) dishonour of a cheque; (d) bank wrongly credits another customer's deposit to us?

Try it first, then show the solutionSolution

1. The cash book is amended only for items the firm must record
2. (b) and (c) are the firm's items; (a) is a timing item awaiting the bank; (d) is the bank's error

Answer: (b) and (c) in the amended cash book; (a) and (d) in the BRS.

Bank Reconciliation Statement in real life

Each concept, met in an everyday situation. Read the situation, answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Topics in this chapter

• BRS with a Bank Overdraft and the Amended Cash Book Method
• Bank Reconciliation Statement: Timing Differences and BRS from the Cash Book Balance

Bank Reconciliation Statement: key facts

Favourable balance

Cash book Dr balance ↔ Pass book Cr balance

Overdraft: cash book Cr ↔ pass book Dr.

Starting from cash book (Dr)

Pass book = CB + cheques issued not presented + direct credits − cheques deposited not credited − direct debits (± errors)

Direct credits: interest, dividend, direct deposit. Direct debits: charges, direct payments, dishonour.

Starting from pass book (Cr)

Cash book = PB − cheques issued not presented − direct credits + cheques deposited not credited + direct debits (± errors)

Every sign reverses.

Overdraft in a BRS

Write the overdraft in the minus column; a negative result is an overdraft in the other book

Same add/less rules as for favourable balances.

Error rule

If the starting book is overstated, deduct; understated, add. If the other book is overstated, add; understated, deduct.

Undercast payment side = cash book overstated.

Wrong amount of a cheque issued

Difference = Correct amount − Recorded amount

₹3,860 entered as ₹3,680: cash book overstated by ₹180.

How the school exam asks Bank Reconciliation Statement

The question patterns to expect, and the method that works for each.

Tricks to remember Bank Reconciliation Statement

Short memory aids. Say each one aloud once, then use it on a question the same day.

• Starting from cash book: add the "I.D.I." items

  Issued cheques not presented, Direct deposits, Interest/dividend credited: add. Everything that lowers the bank's balance: less.

  Use it when: Favourable cash book balance.

• Flip rule

  Start from the other book, flip every sign.

  Use it when: BRS from the pass book.

• Overdraft goes to minus

  "OD = Owed to the bank = minus."

  Use it when: Overdraft questions.

• Amend or reconcile?

  "If the firm can fix it, amend it; if the bank must catch up, reconcile it."

  Use it when: Two-stage questions.

Bank Reconciliation Statement: exam-level solved questions

Ordered from exam level to HOTS. Cover the solution, write your own, then compare step by step.

Case-study practice (Section E style)

Read the situation, then answer every part. In a school exam set on the board pattern this is a 4-mark question split into 1 + 1 + 2 marks.

Where the marks are

How a typical answer is split into step marks. Show every step: a right final answer alone rarely earns full marks.

Where students lose marks in Bank Reconciliation Statement

The slips examiners see most often, and what to write instead.

• ✗Mistake: Reversing the signs when starting from the pass book

  Students memorise "add cheques not presented" without knowing why.

  Wrong working

  Pass book 55,290 + cheques not presented 18,500 ...

  Right working

  Pass book 55,290 − cheques not presented 18,500 ...

  ✓Do this: Ask which book is higher because of the item; signs flip when you start from the other book.

  Usually costs: ½ mark per item, often 2-3 marks.

• ✗Mistake: Writing an overdraft in the plus column

  It is the starting figure, so it goes first.

  ✓Do this: An overdraft is negative: put it in the minus column, then add and deduct as usual.

  Usually costs: The whole answer goes wrong; 2-3 marks.

• ✗Mistake: Including cheques that were presented before the date

  The question gives a total and then says part was presented.

  Wrong working

  Cheques issued ₹24,000, of which ₹15,000 presented: add ₹24,000

  Right working

  Add only the unpresented ₹9,000

  ✓Do this: Only the uncleared part on the BRS date is a difference.

  Usually costs: 1 mark.

• ✗Mistake: Putting cheques not presented in the amended cash book

  Everything seems to need adjusting.

  ✓Do this: The cash book is already right for these; they belong only in the BRS. Amend only for the firm's unrecorded items and its own errors.

  Usually costs: 1-2 marks.

• ✗Mistake: Mishandling undercasting

  Under-cast sounds like "too little", so students add.

  Wrong working

  Payment side undercast by ₹500: add ₹500 (starting from the cash book)

  Right working

  Payments too low makes the balance too high: less ₹500

  ✓Do this: Undercast receipts = balance too low; undercast payments = balance too high.

  Usually costs: ½-1 mark.

NCERT exercise guide: Bank Reconciliation Statement

What each exercise in the NCERT chapter tests, how to approach it, and a question of the same kind solved step by step. Questions here are written in our own words.

Practice questions on Bank Reconciliation Statement

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

1. Q1 · 1 mark · MCQExam level

   A BRS is prepared by:
   (a) the bank
   (b) the account holder
   (c) the auditor only
   (d) the creditors

   Hint

   Whose cash book is it?

   Answer

   (b) the account holder

2. Q2 · 1 mark · MCQExam level

   Interest credited by the bank, when starting from the cash book (Dr balance), is:
   (a) added
   (b) deducted
   (c) ignored
   (d) shown only in the amended cash book

   Hint

   It raises the pass book balance.

   Answer

   (a) added

3. Q3 · 1 mark · Very short answerExam level

   State two timing differences that make the pass book balance lower than the cash book balance.

   Hint

   One is a deposit, one is a charge.

   Answer

   Cheques deposited but not yet credited; bank charges (also direct payments by the bank, dishonour).

4. Q4 · 3 marks · Short answerExam level

   Explain any three reasons why a BRS is needed.

   Hint

   Errors, unrecorded items, fraud.

   Answer

   (1) It explains the difference between the two balances on a date. (2) It reveals errors in either book so they can be corrected. (3) It shows items not yet recorded in the cash book (charges, interest, direct deposits) and helps prevent fraud by the cashier; it also gives the correct bank balance for the Balance Sheet.

5. Q5 · 3 marks · Short answerHarder exam level

   Suppose the cash book shows ₹25,000 (Dr). Cheques issued ₹6,000 are not presented; cheques of ₹4,500 deposited are not credited; bank charges are ₹200. Find the pass book balance.

   Hint

   One add, two less.

   Answer

   25,000 + 6,000 − 4,500 − 200 = ₹26,300 (Cr) as per pass book.

6. Q6 · 3 marks · Short answerHarder exam level

   Suppose the pass book shows an overdraft of ₹12,000. Cheques deposited ₹5,000 are not credited; cheques issued ₹3,200 are not presented; interest on overdraft ₹450 is not in the cash book. Find the cash book balance.

   Hint

   Start with −12,000.

   Answer

   −12,000 + 5,000 − 3,200 + 450 = −9,750: overdraft as per cash book ₹9,750.

7. Q7 · 3 marks · Short answerHarder exam level

   Starting from the cash book (Dr), state with reason whether each is added or deducted: (a) cheque of ₹1,750 issued was entered as ₹1,570; (b) the bank credited ₹800 twice for the same deposit; (c) payment side of the bank column overcast by ₹250.

   Hint

   Which book is wrong, and which way?

   Answer

   (a) Cash book overstated by ₹180: deduct. (b) Pass book overstated by ₹800: add. (c) Cash book understated by ₹250: add.

8. Q8 · 4 marks · Short answerHarder exam level

   Suppose the cash book of Zoya shows an overdraft of ₹18,000 on 31st March. Cheques of ₹7,200 issued were not presented; ₹3,500 deposited was not credited; the bank paid a loan EMI of ₹6,000 directly; a dividend of ₹2,100 was collected by the bank. Prepare a BRS.

   Hint

   Put the overdraft in the minus column.

   Answer

   Minus: overdraft 18,000; cheques not credited 3,500; EMI 6,000 = 27,500. Plus: cheques not presented 7,200; dividend 2,100 = 9,300. Result 9,300 − 27,500 = −18,200: overdraft as per pass book ₹18,200.

9. Q9 · 4 marks · Short answerHarder exam level

   Prepare an amended cash book from: cash book balance ₹40,000 (Dr); bank charges ₹300; interest credited ₹900; a customer's cheque of ₹2,500 dishonoured; a direct deposit by a customer ₹4,000; a cheque of ₹1,200 issued recorded twice in the cash book. What is the adjusted balance?

   Hint

   The double entry of a cheque understates the balance.

   Answer

   Dr: 40,000 + interest 900 + direct deposit 4,000 + cheque recorded twice 1,200 = 46,100. Cr: charges 300 + dishonour 2,500 = 2,800. Adjusted balance ₹43,300.

10. Q10 · 3 marks · Short answerHarder exam level

    Distinguish between a cash book and a pass book on three bases.

    Hint

    Who keeps it; what a debit means.

    Answer

    Kept by: the firm against the bank. Favourable balance: debit in the cash book against credit in the pass book. Contents: all cash and bank items of the firm against only the firm's dealings with that bank.

11. Q11 · 6 marks · Long answerHarder exam level

    Suppose the cash book of Ruby shows ₹56,000 (Dr) on 30th September. (i) Of cheques of ₹24,000 issued, ₹15,000 were presented before the 30th; (ii) of cheques of ₹18,000 deposited, ₹6,000 were credited after the 30th; (iii) insurance premium ₹3,600 paid by the bank; (iv) the bank credited ₹2,000 interest; (v) a cheque of ₹900 issued was recorded in the cash column. Prepare the BRS.

    Hint

    Only the uncleared parts matter; (v) means the bank paid it but the bank column did not record it.

    Answer

    Plus: 56,000 + cheques not presented 9,000 + interest 2,000 = 67,000. Minus: cheques not credited 6,000 + insurance 3,600 + cheque paid but not in bank column 900 = 10,500. Pass book ₹56,500 (Cr).

12. Q12 · 4 marks · Long answerHOTS / competency

    Suppose a cashier tells the owner, "The bank statement is always right, so just copy its balance into the cash book." Give three reasons why this is wrong, with an example of each.

    Hint

    Banks make mistakes; timing; control.

    Answer

    (1) Timing: cheques issued but not presented are genuine payments; copying the bank balance would overstate the money available. (2) Bank errors: a deposit credited to the wrong customer would be copied as if real. (3) Control: comparing two independent records exposes errors and frauds; copying one into the other removes that check. Only items the firm has not recorded (charges, interest, direct deposits) should be entered after verification.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1. 1.What is a pass book?Show answer

   The bank's copy of the customer's account, showing deposits (credits), withdrawals (debits) and the balance.

2. 2.What does a credit balance in the bank column of the cash book mean?Show answer

   An overdraft.

3. 3.Name two items that are recorded first by the bank.Show answer

   Bank charges and interest (also direct deposits, direct payments, dishonour).

4. 4.Starting from the cash book (Dr), is a dishonoured cheque added or deducted?Show answer

   Deducted.

5. 5.Which items are not entered in the amended cash book?Show answer

   Cheques issued but not presented, cheques deposited but not collected, and bank errors.

6. 6.Give one error by the bank.Show answer

   Crediting another customer's deposit to the firm's account.

7. 7.Which balance goes into the Balance Sheet?Show answer

   The adjusted (amended) cash book balance.

8. 8.Undercasting of the receipts side of the bank column makes the cash book balance...?Show answer

   Lower than it should be.

Quick revision checklist

The night before the exam: can you do each of these without looking?

• ☐Can you say what Dr and Cr balances mean in each book?
• ☐Can you list eight causes of difference and group them?
• ☐Can you treat cheques issued not presented from both sides?
• ☐Can you handle interest, charges, direct deposits and dishonour?
• ☐Can you treat an undercast or overcast column correctly?
• ☐Can you prepare a BRS starting with an overdraft?
• ☐Can you prepare an amended cash book and say what stays out of it?
• ☐Can you find a missing item from the two balances?
• ☐Can you explain three reasons a BRS is needed?

Bank Reconciliation Statement: frequently asked questions