NCERT Class 11 Accountancy Financial Accounting-I: Chapter 5 — Bank Reconciliation Statement
This chapter introduces the Bank Reconciliation Statement (BRS) in NCERT Class 11 Accountancy, Financial Accounting-I. It explains that businesses maintain cash books to record cash and bank transactions. While the cash book shows bank balances, these often differ from the bank's records (bank statement or passbook). The chapter details the need for reconciliation, highlighting that discrepancies arise due to timing differences in recording transactions. It covers identifying causes of these differences, such as unpresented cheques or uncredited deposits. The chapter also presents the format for preparing a BRS to tally the cash book and passbook balances, aiding students in understanding and managing bank-related accounting discrepancies for effective financial record-keeping.
Quick info
| Board | CBSE / NCERT |
|---|---|
| Class | Class 11 |
| Subject | Accountancy |
| Book | Financial Accounting-I |
| Chapter | Chapter 5 — Bank Reconciliation Statement |
| Language | English |
| PDF type | NCERT Textbook |
| Session | CBSE 2026 |
| Reading time | 4 minutes |
| Word count | 601 |
Learning outcomes
- State the meaning and need for preparing a Bank Reconciliation Statement.
- Identify the causes of differences between bank balances shown in the cash book and the pass book.
- Prepare a Bank Reconciliation Statement.
- Ascertain the correct bank balance as per the cash book.
Vocabulary
| Word | Meaning |
|---|---|
| Cash book | A book that records all cash and bank transactions of a business. |
| Bank statement | A copy of a bank account as shown by the bank's records, detailing deposits and withdrawals. |
| Passbook | A copy of a customer's bank account provided by the bank, showing all transactions. |
| Reconciliation | The process of comparing two sets of records to ensure they agree. |
| Unpresented cheques | Cheques issued by a business but not yet cashed by the recipient. |
| Uncredited deposits | Cheques or amounts deposited by a business into its bank account that have not yet been credited by the bank. |
| Credit balance | A balance in a bank account where deposits exceed withdrawals. |
| Debit balance (overdraft) | A balance in a bank account where withdrawals exceed deposits, resulting in a negative balance. |
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Practice questions
- What is the primary purpose of a Bank Reconciliation Statement? Answer: To reconcile the differences between the bank balance shown in the cash book and the balance shown in the bank statement/passbook.
- Name two common reasons for differences between the cash book and pass book balances. Answer: Unpresented cheques and uncredited deposits are two common reasons.
- What does a credit balance in a bank statement typically indicate? Answer: A credit balance indicates that deposits exceed withdrawals, meaning the account holder has funds in the bank.
- What is an 'unpresented cheque'? Answer: An unpresented cheque is a cheque that has been issued by the company but has not yet been presented to the bank for payment by the payee.
Frequently asked questions
What is a Bank Reconciliation Statement?
A Bank Reconciliation Statement is a report prepared to reconcile the differences between the cash book's bank balance and the bank statement's balance on a specific date.
Why is it necessary to prepare a Bank Reconciliation Statement?
It is necessary to identify and correct errors or discrepancies, ensure accuracy of financial records, and detect fraud or unauthorized transactions.
What are the main causes of differences between the cash book and pass book balances?
Common causes include cheques issued but not presented, cheques deposited but not credited, bank charges, interest credited/debited by the bank, and errors in recording.
How does a bank statement differ from a passbook?
A bank statement is a detailed list of transactions provided by the bank, often electronically, while a passbook is a small booklet given to the customer that is updated by the bank with transactions.
What does it mean if the bank balance as per the passbook shows an overdraft?
An overdraft means that the withdrawals from the bank account have exceeded the deposits, resulting in a negative balance owed to the bank.
Can a Bank Reconciliation Statement be prepared from the bank's perspective?
Yes, it can be prepared starting from the passbook balance and adjusting for items not recorded in the passbook, to arrive at the cash book balance.
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Topics covered
NCERT Class 11 Accountancy — Financial Accounting-I — Chapter 5 — Bank Reconciliation Statement. Verified by NCERT Help Editorial Team. Reviewed on 29 Jul 2026. Last updated 10 Aug 2026.