When the trial balance does not tally due to the one-sided errors in the books, an accountant puts the difference between the debit and credit side of the trial balance on the shorter side as a suspense Account. As and when an error is located it has to be rectified. After rectification, the balance in…
Errors in Trial Balance are mistakes made during the accounting process that cannot always be detected by the trial balance. A trial balance can disagree due to a number of errors. Here we discuss the possibilities of how a trial balances differences. If there is a non-agreement of trial balance the possible reasons could be…
A trial balance is a bookkeeping tool that lists all the balances in a business’s general ledger accounts at a given time. It’s a part of a financial statement prepared at the end of an accounting year to ensure the accuracy of bookkeeping system entries. Features of trial balance: As the trial balance definition suggests,…
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 process of reconciliation ensures the accuracy and validity of financial information. Also, a proper reconciliation process ensures that unauthorized changes have not occurred to transactions during processing. Bank account reconciliation can be manually carried out at a periodic interval when extracts of the Cash Book and updated Pass Book/bank statement are readily available. The…
Reconciliation is the process of comparing transactions that have been recorded internally against monthly statements from external sources like banks to see if there are differences in the records and to correct any discrepancies. Further, reconciliation involves resolving any discrepancies that may have been discovered. Need for the reconciliation: Companies perform bank reconciliation to ensure…
No, a passbook is not a mirror image of a cash book. Though passbooks and cash books provide related financial information, they are not mirror images of each other. As the name says, cash transactions related to cash received or payments made by an organization are only recorded in a Cash Book. This could include…
A Bank Pass Book refers to a Savings account Pass Book. It is issued by banks for a running or operating bank account. But practically, Pass Book is used to be issued for Current Account for limited transaction accounts, Recurring Deposit Account, Small loan accounts. The transactions appearing on a passbook is a conclusive evidence…
As the name says, cash transactions related to cash received or payments made by an organization are only recorded in a Cash Book. This could include money that is received, paid out, and even deposited into or withdrawn from a bank account. All transactions in a cash book have two sides, debit and credit. All…