It is a book of original entry and final entry.
In other words we can say that always opposite entry in cash book and pass book. The bank pass book indicates the amount paid into the bank and the amount withdrawn there form. The pass book balance or any given data must be the same as the balance shown by the bank column of the cash book on the same date.
The reason responsible for the difference may be delay in intimation, time gap between recordings of transaction in cash book and pass book due to errors and omissions in cash book and pass book.
Cheque issued but not presented for payment: When cheque are issued then immediately make entry in the cash book. The cheque issued can be presented for payment to the bank within six month from the date of cheque as per banking law.
The cheque are presented for payment after the expiry of the above period then payment is refused by the bank. This cheque is also known as stale cheque. Cheque paid into the bank but not yet cleared: As soon as the cheque are deposited into the bank, the immediately entry is passed in the cash book.
This will make entry in pass book only when cheque are cleared. Interst allowed by the bank: Bank might have credited the account of the customer with the interest and may have made the entry in the pass book.
Interest and Bank charges debited by bank: Sometime bank charges interest from the customer then immediately entry in the pass book but not in cash book.
Interst, dividend collected by the bank: Direct payment by bank: This entry is made in the cash book only when the necessary intimation to that effect is received from the bank by the client.
The entries in the cash and pass book may be on different dates. It is only recorded in the pass book not in the cash book. Dishonour of bill discounted with the bank: Sometimes, customer get their bills discounted with the bank.ADVERTISEMENTS: Reasons for Difference in Pass Book and Cash Book!
1. Cheques Recorded in Cash Book but not Yet Credited by Bank: Cheques received are entered in the Cash Book as soon as they are received. There may be a delay of a day or two in . A cash book is a financial journal that contains all cash receipts and payments, including bank deposits and withdrawals.
Learn the difference between free cash flow and operating cash flow. Reasons for Difference in Pass Book and Cash Book! 1. Cheques Recorded in Cash Book but not Yet Credited by Bank: there must be a statement to explain why there is a difference between the balance shown by the Pass Book and that shown by the Cash Book on a particular date.
There is a slight difference between cash book and passbook, that is cash book keeps a record of cash transactions whereas passbook is issued by the bank to the .
Explanation of Difference: Cash book is written by depositor and pass book is written by the bank.
All transactions related to bank are recorded in the bank column of the cash book and these transactions are also recorded in the pass book by the bank. Reasons for difference in Pass Book and Cash Book Balances. This will increase the balance in the pass book and a difference in the two balances will exits unless a corresponding entry is recorded in the cash book by the firm.
Direct payment through bank.