Harsha Lal- ACW Accounts at edumarz
Answer- Sometimes the difference between the two balances may be because of an error on part of the bank pass book and cash book. The differences are due to :-
Error committed by the firm- The wrong totaling of accounts, omission or wrong posting of cheques issued etc. The reconciliation statement finds and resolves this issue.
Errors committed by banks- wrong recording or wrong totaling of transactions leads to difference in cash book & passbook.