Chapter 5 of Class 11 Accountancy, Bank Reconciliation Statement, explains a very common issue faced in accounting — the mismatch between the bank balance as per the Cash Book and the bank statement. It teaches students how to prepare a Bank Reconciliation Statement (BRS) to identify and explain the differences between these two records. This chapter helps students develop a systematic way to detect errors and timing differences in transactions.
I’ve chosen to write on this topic because this chapter often looks small but carries great weight in exams and in real-life accounting too. Many students ignore BRS assuming it’s simple, but during board exam questions, even a small mistake in plus or minus can cost marks. Personally, I remember struggling with bank charges and cheque-related adjustments in the beginning. Once you understand the reason behind each entry, the entire topic becomes quite logical. With the rise in digital transactions, understanding the flow of funds and reconciling statements is more relevant than ever. To make it easier, I’m also sharing the free PDF of this chapter so you can revise anytime.
What Is a Bank Reconciliation Statement?
A Bank Reconciliation Statement is a summary that compares the balance shown in the company’s Cash Book (Bank Column) with the balance in the Pass Book or bank statement.
There are many reasons for the mismatch, like:
- Cheques issued but not yet presented
- Cheques deposited but not yet cleared
- Bank charges debited by the bank but not recorded in Cash Book
- Direct deposit in the bank by customers
- Errors made in either Cash Book or Pass Book
By preparing the BRS, businesses can ensure their books are accurate and complete.
Why the Mismatch Happens
Let’s say you issued a cheque of ₹5,000 on 28th March but the person deposits it on 2nd April. Your Cash Book already shows ₹5,000 less, but the bank statement will still show the old balance. This timing difference is a common reason for mismatch.
Structure of a BRS
Here is a basic format:
| Particulars | Amount (₹) |
|---|---|
| Balance as per Cash Book | XXXX |
| Add: Cheques issued but not presented | XXXX |
| Less: Cheques deposited not cleared | XXXX |
| Add: Direct deposit by customers | XXXX |
| Less: Bank charges not recorded | XXXX |
| Final balance as per Pass Book | XXXX |
Sometimes the question may ask you to start with Pass Book balance. The additions and subtractions will change accordingly.
How to Prepare BRS Easily
- First understand the question: What balance is given? Cash Book or Pass Book?
- Mark each item: Does it increase or decrease the balance?
- Always keep a plus-minus mindset.
- Adjust one item at a time.
- Practice lots of examples.
Once you get comfortable, this chapter becomes one of the easiest to score.
Download PDF
Click Here to Download NCERT Class 11 Accountancy Chapter 5: Bank Reconciliation Statement PDF
