In case, the books show an adverse balance (i.e. an overdraft) the amount of the overdraft should be put in the minus column. The Reconciliation Statement should then by prepared on the same pattern as if there is a favourable balance instead of their being an overdraft. The above technique will be clear with the help of the following illustrations. Where Causes of Difference are given rom the following particulars prepare a Bank Reconciliation Statement as on 31st December, 2000. (1) Balance as per Cash Book Rs 5,800. (ii) Cheques issued but not presented for payment Rs 2,000. (iii) Cheques sent for collection but not collected upto 31st December, 1990 Rs 1.500. (iv) The Bank had wrongly debited the account of the firm by Rs 200 which was rectified by them after 31st December. Balance as per Pass Book is Rs 6,100. There is a difference of Rs 300 between the balance as shown by the Cash Book and the balance as shown by the Bank Pass Book. A reconciliation statement can be prepared to reconcile the balances shown by the two books on the following basis: (i) The balance as shown by the Cash Book will be taken as the starting point. (ii) The cheques issued but not presented for payment have not been recorded in the Bank Pass Book. The balance as per Pass Book has to be found out. The Bank has not yet passed the entry for the payment of these cheques since they have not been presented for payment. The balance, therefore, in the Pass Book should be more. The amount of Rs 2,000 should, therefore, be added to the balance as shown by the Cash Book. (it) Cheques sent for collection but not yet collected must have been entered in the Cash Book but must not have been credited by the Bank to the firm's account since they have not yet been collected. The balance in the Pass Book should therefore, be less as compared to the Cash Book. The amount of Rs 1.500 should therefore, be deducted out of the balance as shown by the Cash Book. (iv) The Bank has wrongly debited the firm's account. This must have resulted in reducing balance as per the Bank Pass Book. The amount should, therefore, be deducted out of the balance shown as per the Cash Book. Bank Reconciliation Statement will now appear as follows: BANK RECONCILIATION STATEMENT Particulars + R Rs 5,800 2.000 w Balance as per Cash Book (in) Add: Cheques issued but not presented for payment (a) Less: Cheques sent for collection hut not yet collected (iv) Less: Amount wrongly debited by the Bank j39 1 500 200 7.800 1.700 Balance as per Bank Pass Book 6.100 Illustration 5.2. From the following particulars, prepare a Bank Reconciliation Statement showing the balance as per Cash Bank as on 31st December, 2000. () Out of cheques of Rs. 9,000 paid on 29th December, Rs. 4,000 appear to have been credited in the Pass Book under 2nd January, 2001. (ii) I had issued cheques in December, 2000 amounting in all to Rs. 16,000 of which I find that Rs. 7,000 worth have been cashed in the same month, a cheque of Rs. 5,000 has been cashed on January 3, 2001, and the rest have not been presented at all. (iii) My Bankers have given me a wrong credit in my Joint Account with my wife in respect of a cheque of Rs. 2,000 paid into my personal account. (iv) Rs. 1,000 for interest on overdraft charged in the Pass Book on 31st December has been entered in my Cash Book as on 4th January, 2001, (1) My Pass Book shows a credit of Rs. 1,200 in my account being interest on my securities collected by my Bankers. (vi) The Bank Balance as per my Pass Book showed an overdraft of Rs. 19,000