Tag: meaning of petty cash book

True. Direct collection received by the bank will increase the balance as per pass book as the bank will credit the passbook as the funds are transferred into the customers bank account. This increases the bank passbook balance as compared to cash book balance as the customer has no information about such transaction and has not recorded it in the cash book. This difference in balance arises due to time difference in recording of the transaction.

Collection charges and incidental charges are the charges levied by the bank for collecting debt for the customer. These expenses are first levied by the bank and then intimated to the customer. Thus, they are first reflected in the pass book.

The journal entry in the  books of the account holder when a cheque is deposited is as follows :

True. Cash book is debited when cash comes in and credited when cash goes out. So, when we receive the cheque, cash book is debited. And, when we further endorse the cheque, the cash book is credited. Thus, endoresed cheque appears on both sides of the cash book.

Cash book is a unique kind of subsidiary book. It plays a dual role. It acts as the book of original entry or prime entry and also as ledger. It is a subsidiary book because entries are first posted in the cash book and then, from there, it is posted in other ledger accounts.

A bank reconciliation statement is prepared to reconcile the balnaces as per cash book (bank column) with the balances as per pass book (bank statement). 

Bank does not send any statement like a 'reconciliation statement' but only provides a 'bank statement'/ 'bank pass book' which gives us the details of transactions undertaken during the period. In fact, bank reconciliation statement is prepared by the business, only to verify the balance as per bank column of cash book and bank statement.It is an important statement for the business.

An unadjusted cash book balance is such balance in which the items only accounted in pass book have not been adjusted yet. 

Bank reconciliation statement is prepared to to reconcile the balances as per cash book (bank column) and pass book (bank statement) by identifying the causes of differences between the two for a particular period. If the two balances match, then there is no need for bank reconciliation statement. So, it is true for a bank reconciliation statement, that it is prepared on a particular date or a single transaction is recorded both in bank passbook as well as in bank cash book or all that the transaction recorded in cash book is as per the client view point. But, but it is not true for a bank reconciliation statement that the balance as per cash book and passbook are same as when the two balances are same, bank reconciliation statement is not required.

In case when the bank collects a note for the depositor the entry for the same would have been entered in the bank statement and so the cash book balance would be less than the bank statement balance.