The balance of a cash book and a passbook can differ for several reasons, including: Timing: Bank transactions are recorded in the customer’s account in real time. Therefore, the date a transaction is recorded in the cash book may be different from the date it is recorded in the passbook. Cheques: Interest payment: Interest on…
Reconciliation is an accounting procedure that compares two sets of records to check that the figures are correct and in agreement. The process of reconciliation ensures the accuracy and validity of financial information. A proper reconciliation process ensures that unauthorized changes have not occurred to transactions during processing. Types of Reconciliations There are two types…
The adjusted cash balance is calculated by taking the ending cash balance from the bank statement and adding any outstanding deposits while deducting outstanding cheques. The adjusted cash balance formula is: Adjusted Cash Balance = Ending Bank Statement Balance + Outstanding Deposits – Outstanding Cheques. To adjust a cash book balance, you can follow these…