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A learner has a cash book and a bank statement that do not agree and needs a repeatable method to reconcile them.
Tick entries that appear in both records, list leftovers, post entries for bank-only items, then prove the adjusted cash book equals the passbook adjusted for timing items.
Five moves: get the passbook, tick, list leftovers, adjust the cash book, prove and sign. Opening balances checked against last month's BRS first.
A signed BRS reaching the passbook balance, an adjusted cash book balance for the balance sheet, and a list of open items carried to next month.
Bank reconciliation is five moves: get the passbook, tick the entries that match, list what is left, adjust the cash book for passbook-only items, and prove that both adjusted balances agree. This worked example takes a small business through March, from a cash book of ₹4,72,500 to a passbook of ₹4,91,060.
Step 1: Get both records for the same period
Download the bank statement for 1 to 31 March and print or export the bank ledger (cash book bank column) for the same dates from Tally, Zoho Books or your spreadsheet.
Check the opening balances first. Here both show ₹3,50,000 on 1 March, because last month’s BRS had no open items. If they did not agree, the difference should equal last month’s open items.
Step 2: Tick the entries that match
Cash book (bank column), March
| Date | Particulars | Receipts (₹) | Payments (₹) | Ticked? |
|---|---|---|---|---|
| 1 Mar | Opening balance | 3,50,000 | ||
| 3 Mar | Mehta Stores, cheque deposited | 1,20,000 | Yes | |
| 6 Mar | Rent, NEFT | 75,000 | Yes | |
| 10 Mar | Gupta & Sons, NEFT received | 85,000 | Yes | |
| 14 Mar | Raw material supplier, cheque | 52,500 | Yes | |
| 18 Mar | Kaveri Traders, UPI received | 64,300 | Yes | |
| 21 Mar | Salaries, NEFT | 38,000 | Yes | |
| 25 Mar | Arora Brothers, cheque deposited | 40,000 | Yes | |
| 27 Mar | Electricity bill, net banking | 15,000 | Yes | |
| 30 Mar | Transporter, cheque no. 004812 | 18,000 | No | |
| 31 Mar | Singh Agencies, cheque deposited | 11,700 | No | |
| Closing balance | 4,72,500 |
Check: ₹3,50,000 + ₹1,20,000 + ₹85,000 + ₹64,300 + ₹40,000 + ₹11,700 = ₹6,71,000 of receipts including the opening balance. Payments: ₹75,000 + ₹52,500 + ₹38,000 + ₹15,000 + ₹18,000 = ₹1,98,500. Closing: ₹6,71,000 − ₹1,98,500 = ₹4,72,500.
Passbook, March
| Date | Narration | Withdrawal (₹) | Deposit (₹) | Ticked? |
|---|---|---|---|---|
| 1 Mar | Opening balance | 3,50,000 | ||
| 4 Mar | CHQ DEP MEHTA STORES | 1,20,000 | Yes | |
| 6 Mar | NEFT DR RENT | 75,000 | Yes | |
| 10 Mar | NEFT CR GUPTA AND SONS | 85,000 | Yes | |
| 15 Mar | CHQ PAID 004798 | 52,500 | Yes | |
| 18 Mar | UPI CR KAVERI TRADERS | 64,300 | Yes | |
| 21 Mar | NEFT DR SALARY | 38,000 | Yes | |
| 22 Mar | NEFT CR VERMA INDUSTRIES | 24,000 | No | |
| 26 Mar | CHQ DEP ARORA BROTHERS | 40,000 | Yes | |
| 27 Mar | BILLPAY ELECTRICITY | 15,000 | Yes | |
| 28 Mar | LOAN EMI DR | 12,400 | No | |
| 31 Mar | INT CR | 1,250 | No | |
| 31 Mar | SERVICE CHARGES INCL GST | 590 | No | |
| Closing balance | 4,91,060 |
Check: ₹3,50,000 + ₹1,20,000 + ₹85,000 + ₹64,300 + ₹24,000 + ₹40,000 + ₹1,250 = ₹6,84,550. Less ₹75,000 + ₹52,500 + ₹38,000 + ₹15,000 + ₹12,400 + ₹590 = ₹1,93,490. Closing: ₹6,84,550 − ₹1,93,490 = ₹4,91,060.
Step 3: Which entries are left after ticking?
Six items are left:
| Item | ₹ | Where it is | Type |
|---|---|---|---|
| Cheque 004812 to transporter, not presented | 18,000 | Cash book only | Timing |
| Singh Agencies cheque, not yet credited | 11,700 | Cash book only | Timing |
| Bank service charges | 590 | Passbook only | Needs entry |
| Interest credited | 1,250 | Passbook only | Needs entry |
| NEFT from Verma Industries | 24,000 | Passbook only | Needs entry |
| Loan EMI | 12,400 | Passbook only | Needs entry |
Step 4: Prepare the statement
| Bank reconciliation statement as at 31 March | ₹ |
|---|---|
| Balance as per cash book | 4,72,500 |
| Add: cheque issued, not yet presented | 18,000 |
| Add: NEFT received, not in books | 24,000 |
| Add: interest credited by bank | 1,250 |
| Less: cheque deposited, not yet credited | (11,700) |
| Less: bank charges | (590) |
| Less: loan EMI debited | (12,400) |
| Balance as per passbook | 4,91,060 |
Arithmetic: ₹4,72,500 + ₹43,250 − ₹24,690 = ₹4,91,060.
Proof. Adjusted cash book: ₹4,72,500 + ₹24,000 + ₹1,250 − ₹590 − ₹12,400 = ₹4,84,760. Adjusted passbook: ₹4,91,060 − ₹18,000 + ₹11,700 = ₹4,84,760. They agree.
Step 5: What do you do after the statement is signed?
- Pass the entries for the four bank-only items: receipt from Verma Industries, interest income, bank charges (with GST if you claim input tax credit) and the EMI split between principal and interest.
- Carry the two timing items to April. Tick them when the cheque is paid and the deposit is credited.
- File the working paper: statement, cash book print, BRS and the documents behind each entry, signed by the preparer and a reviewer.
What to read next
- Next in this series: Bank reconciliation statement (BRS) in India: format and preparation
- Go deeper: Reconciliation playbook: monthly close in India
- Background: Bank reconciliation statement: when do you add and when do you deduct?
- For teams: Bank reconciliation software for India
The same five moves at a few hundred lines a month are where TransactIG helps: it matches bank statement lines to your books, sends the leftovers to an exception queue and produces audit-ready exports.