Overdraft balance as per cash book . Perpare BRS ----
bank charges debited in the pass book but not recorded in cash book amounted to Rs .590
Give reason also ??????
Shivangi,
This transaction would lead to an increase in the overdraft balance by Rs 590.
Reason: Bank charges are expenses for the business and if they are not recorded in the Cash Book, then it implies an expense of Rs 590 is not recorded, so when you reconcile it you will record this expense because of which the overdraft balance as per Cash Book (or the negative balance) will further increase.
This transaction would lead to an increase in the overdraft balance by Rs 590.
Reason: Bank charges are expenses for the business and if they are not recorded in the Cash Book, then it implies an expense of Rs 590 is not recorded, so when you reconcile it you will record this expense because of which the overdraft balance as per Cash Book (or the negative balance) will further increase.