What are items in the cash book but not in the passbook and vice versa?

Banking & FinanceFinance ManagementGrowth & Empowerment

Following items will appear in cash book but not in bank pass book

  • Cheques which are issued, but not debited in the bank.

In cash books, entries for cheques issued are recorded immediately (reduces bank balances in books). The reason for not appearing in the passbook may be the cheque, which is in under clearance or the payee did not submit it to the bank.

  • Cheques that are deposited, but not credited by the bank.

In cash books, firms immediately record the transactions (increases the balance in books).

The reason for not appearing in the passbook may be that the bank is yet to clear the or may be the cheque is not deposited on the same date or immediately.

Errors

Sometimes, the bank may miss the entry in the cash book.

Standing instructions

In cash books, the firms immediately record the entries but, in the passbook record will be printed after the payment.

Standing instructions are for the regular payments like telephone bills, insurance, installments etc.

Following items appears in passbook but not in cash book −

  • Interests, charges

Bank credits interest on fixed deposits and charges for interest on overdrafts, services, pay orders etc. whenever these are charged immediately, they are recorded in passbook but, in the cash book these are entered at a later date.

  • Direct deposits

Transactions related to direct deposits through banking. These transactions are recorded by the bank immediately but in cash books, they appear later.

  • Collection for bills

Bills sent for collection will be collected and recorded in passbook (on credit side) immediately but in cash books, these are recorded after getting information from bank

Errors

Sometimes, bookkeepers may miss some entries.

raja
Published on 13-Jul-2021 11:58:43
Advertisements