VERY EASY Bank Reconciliation Statement BRS Basics terminology and solving a question Class 11 BCOM

In this video, I have explained the basics and terminology often used in BRS.
We then solve an illustration and a Practical Problem for TS Grewal Double Entry Book Keeping book for CBSE. This method of ADD and LESS is acceptable across all major central and state boards so do not worry!

NOTES:
BANK RECONCILIATION STATEMENT BASICS:

OVERDRAFT: WHEN WE WITHDRAW MORE MONEY THAN IS PRESENT IN OUR BANK ACCOUNT

When bank credits our bank account – WE RECEIVE MONEY
When bank debits our bank account – MONEY GETS DEDUCTED FROM OUR BANK ACCOUNT


As per CASH BOOK – Debit balance of Bank column- Favorable balance // we have money in bank account

As per CASH BOOK – Credit balance of Bank column- Unfavorable balance // we owe money to the bank (BANK OVERDRAFT)


PASS BOOK or Bank Statement – DEBIT BALANCE – UNFAVOURABLE // we owe money to the bank (BANK OVERDRAFT)

PASS BOOK or Bank Statement – CREDIT BALANCE –FAVOURABLE // we have money in bank account

REMEMBER BY HEART:
BRS ADD ITEMS:
1. Cheque issued but not yet presented
2. Collection made on standing instruction
3. Cash/cheque deposited into our bank directly by a customer
4. Bank allowed interest/we received interest
BRS LESS ITEMS:
1. Cheque deposited but not yet collected/cleared
2. Payment made on standing instruction
3. Cheque dishonored
4. Bank charges
5. Bank charged interest/ we paid interest on OVERDRAFT