Harsha Lal- ACW Accounts at edumarz
Answer- Many a times there is a difference in balances of both the books I.e cash book of the firm and bank pass book . This difference may be due to the different timings of recording the transactions or there can be an error which is made by the bank while recording the transactions.
In any of the either case there is a need to prepare the Bank Reconciliation Statement, to rectify those errors.
So, the definition of Bank Reconciliation Statement is that, it is a statement which is prepared to reconcile the errors which may have arisen while recording the balances in the cash book of the company and the balances as per pass book of the bank.