What is BRS?

What is BRS?

For reconciling the balances as shown in the Cash Book and passbook a reconciliation statement is prepared known as Bank Reconciliation Statement or BRS. In other words, BRS is a statement that is prepared for reconciling the difference between balances as per the cash book’s bank column and passbook on a given date.

What is BRS and what are the causes of difference in BRS give 5 examples?

Causes of Difference in Bank Reconciliation Statement (BRS) Reconciliation statement is a record book which lists the changes that appear in either book (cashbook or passbook). Errors a bank or a business make. Time difference in recording an entry.

What is BRS What are the causes of disagreement between cash book and pass book?

5,000 between the balance as shown by the cash book and the balance as shown by the pass book. i. The bank might have collected rent, dividend, bills of exchange, interest etc., due for the customer as per standing instructions . Bank credits interest on the credit balance of the customer’s account.

Why is BRS necessary?

A Bank Reconciliation Statement is needed and is important because of the following reasons: Helps in detecting and preventing frauds and errors in recording the Banking transactions. It helps in incorporating certain expenditures/income debited/credited by Bank in the books of accounts.

What is BRS example?

Bank Reconciliation Example – 1 A cheque of $300 was deposited, but not collected by the bank. Bank charges of $50 were recorded in Passbook, but not in Cash Book. Cheques worth $200 were issued, but not presented for payment. Bank interest of $100 was recorded in Passbook, but not in Cash Book.

Who prepared BRS?

the bank accountant
Generally, the BRS is prepared by the bank accountant.

What are the reasons why the balance on the bank statement may differ from the balance in the cash account?

The difference between cash book balance and bank statement balance results due to certain transactions been recorded by either the company or the bank. Such discrepancies are regularly noted due to time lags in processing transactions and lack of knowledge of certain charges debited to the company account by the bank.

What are the most common reasons for differences between the book and bank cash balances?

Reasons why the bank balance differs from the book balance

• Outstanding checks. The company has issued checks that have not yet been presented to the bank for payment.
• Deposits in transit.
• Interest on deposited cash.
• Bank service fees.
• Check printing charges.
• Bank error.
• Company error.

How cash book is different from passbook?

Cash book keeps a record of cash transactions. Passbook is issued by the bank to the account holder that records the deposits and withdrawals. Cash book is prepared by the firms whereas Passbook is written by banks and retained by the customer.

Why is BRS important?

How do you solve BRS in accounting?

Using the cash balance shown on the bank statement, add back any deposits in transit. Deduct any outstanding checks. This will provide the adjusted bank cash balance. Next, use the company’s ending cash balance, add any interest earned and notes receivable amount.

What are the two reasons for differences in the bank and book balance?

What is the difference between Bank Statement Balance and cash book Balance?

Reasons for difference/disagreement between Bank Statement Balance and Cash Book Balance: Normally, the difference in the cash book balance with the bank statement balance are due to a lack of knowledge of what the other party (bank or business) has been doing.

What is the importance of BRS in accounting?

The idea of BRS is to discover the various things that the bank has done in the bank statement which business was not aware of, put right anything that is wrong and draw up a logical explanation of the remaining differences, which are not errors but are delayed by the time lag.

How accurate is the closing balance in the cash book?

Theoretically, closing balance in the cash book should be the same as the balance in the bank statement on the same date. The independent record of bank statement therefore offers an excellent check on the accuracy and entirety of the cash book.

What is a bank statement in accounting?

A bank statement provides an independent record of exactly those transactions which are entered in the bank column of a cash book. Theoretically, closing balance in the cash book should be the same as the balance in the bank statement on the same date.