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913 1.(a) Where causes of difference are given and Bank Reconciliation Statement is to be prepared without adjusting the Cash Book (1) When bank favourable balance as per the Cash Book is given If we start Reconciliation Statement with bank favourable balance as per the Cash Book, we are to ascertain the impact of each item (causing a difference) on the Pass Book favourable balance. In other words, we will have to see whether a particular item increases or decreases the favourable balance as per the Pass Book. Now add : Those items which increase the Pass Book favourable balance more than the Cash Book favourable balance. Examples are: (a) Cheques issued but not presented; (b) Interest credited by bank not entered in the Cash Book; and (c) Cash directly deposited into the bank but not recorded in the Cash Book etc. Deduct: Those items which decrease the Pass Book favourable balance more than the Cash Book favourable balance. Examples are: (a) Cheques deposited but not credited by the bank; (b) Bank charges not recorded in the Cash Book; and c) Direct payment by bank as per standing order not recorded in the Cash Book etc. Illustration 1 From the following particulars, prepare a Bank Reconciliation Statement as on 31st December, 2016. (i) Bank balance as per the Cash Book 25,450. (ii) A number of cheques were deposited in the bank but on 31st December, 2016 a cheque for ? 500 was not credited in the Pass Book (iii) Several cheques aggregating 5,000 were issued but only cheques for 4,500 were presented to the Bank for payment. (iv) The bank had directly collected dividend

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