LEDGER AND TRIAL BALANCE

 

Method of Preparing BRS Starting with by the Balance / overdraft as per Bank Column of Cash Book.

Note : To get more from less means something is to be added therefore + item & To get less from more, something is to be deducted therefore _ item.

1. First of all write :

Under Plus Item – If the Cash Book Balance is debit or favourable or simple balance.

Under Minus Item – If the Credit Balance or overdraft as per Cash Book is given.

2. Now study the point of difference :

1. If the entry is done in the Cash Book and not in the Pass Book then .


1. If it is done on the debit side of Cash Book, Balance in the Cash Book will be more as compared to Pass Book and hence the item will be – item as shown in the box above.


2. Where as if the entry is done on the Credit side of Cash Book, the Balance in the Cash Book will be less as compared to Pass Book and hence the item will be + item.


2. If the entry is done in the Pass Book and not in the Cash Book then.


1. if done on the Credit side of Pass Book –

Pass Book Balance is more as compared to Cash Book – item.

1. It it is done on the Debit side of Pass Book –

Pass Book Balance is less as compared to Cash Book (–) item

3. At the end + items and – items are totalled.

1. If total of Plus Items is more than the total of (–) items Difference is Cr Balance or favourable balance as per Pass Book.


2. Where as if the – items total is more than the + items total Difference is Dr

Balance or overdraft as per Pass Book.

Ready Reference :

+ Items (Items which increases the Pass Book Balances or decreases the Cash Book Balance)

1. Cheques issued but not yet presented.
2. Credits made by the bank for Interest.
3. Amount directly deposited by the customers in our bank A/c.
4. Interest and dividend collected by the bank.
5. Cheques paid into the bank but omitted to be recorded in the Cash Book.

– Items (Items which, decreases the Pass Book Balance or increase the Cash Book Balance)

1. Cheques sent to the bank for collection but not yet credited by the bank.
2. Cheques paid into the bank but dishonoured.
3. Direct payments made by the bank.
4. Bank charges, commission etc. debited by the bank.
5. Cheqes issued but omitted to be recorded in the Cash Book.

Case II – Starting with Pass Book Balance / overdraft

1. First of all write under

+ Item – If Cr Balance, favaurable balance or Simply Balance as per Pass Book is given.
(–) Item If Debit Balance or overdraft as per Pass Book is given.

2. Now study the point of difference between the Cash Book and Pass Book.

1. If the entry is done in the Cash Book and not in the Pass Book then.


1. If is done on the Debit side of Cash Book Balance in the Cash will be more as compared to Pass Book and hence the item is to be added in the Pass Book Balance to get the Cash Book Balance i.e. + item.


2. Where as if the entry is done on the Credit side of Cash Book Cash Book Balance will be less as compared to Pass Book hence (–) item


2. If the entry is done in the Pass Book and not in the Cash Book then.


1. if it is done on the Debit side of Pass Book Pass Book Balance is less as compared to Cash Book item is to be added in Pass Book Balance to get the Cash Book Balance + item.


2. if is done on the Credit side of Pass Book Pass Book Balance is more as compare to Cash Book item. (–) item.

3. At the end + item and – item are totalled

1. If total of (+) items is more than the total of (–) ⇒ Differences is favourable Balance or Debit Balance as per Cash Book .


2. Where as if the total of (–) items is more than the total of + items ⇒ Difference is unfavourable or overdraft as per Cash Book.

 

CBSE Accountancy Class XI ( By Mr. Kailash Gururani )
Email Id : kailash.gururani@rediffmail.com