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Home Bank Reconciliation Statement Difference Between Cash Book and Pass Book
 
 

Difference Between Cash Book and Pass Book:

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Learning objectives of this article:
  • What is difference between cash book and pass book?

Explanation of Difference:

Cash book is written by depositor and pass book is written by the bank. All transactions related to bank are recorded in the bank column of the cash book and these transactions are also recorded in the pass book by the bank. Following are the main points of difference between cash book and pass book:

Cash Book

Pass Book

1. It is written by the depositor. 1. It is written by the bank but remains in the depositor's possession.
2. Money deposited is recorded on the debit side and money withdrawn on credit side. 2. Money deposited is entered on the credit side and withdrawn on the debit side.
3. A check deposited for collection is recorded on the date of deposit. 3. It is recorded on the date when it is actually collected from the debtor's bank.
4. A check when issued to a creditor is recorded on the date of issue. 4. It is recorded when it is paid by the bank to the creditor.
5. Its debit balance shows cash at bank and credit balance shows bank overdraft. 5. Its debit balance shows bank overdraft and credit balance shows cash at bank.

Examples are always the best way to understand. Consider the following example:

Example:

Enter the following transactions in the cash book and pass book:

Jan. 2005   $
1. Mr. X opened a current account with Standard Chartered Bank. 80,000
3. Paid Mr. N by check. 8,000
5. Received a check from Mr. S and deposited into the bank. 16,000
8. Withdrew from bank for office use. 6,000
10. Paid rent by check. 10,000
14. Bank charges debited by bank 400
17. Paid Mr. Z by check 3,000

Solution:

Cash Book (bank column only)

Date Particulars V/N L/F Bank Date Particulars V/N L/F Bank
1.1.05 Cash A/C   C 80,000 3.1.05 Mr. N A/C   7 8,000
  Mr. S A/C   5 16,000 8.1.05 Cash A/C   C 6,000
          10.1.05 Rent A/C   9 10,000
          14.1.05 Bank Charges A/C   11 400
          17.1.05 Mr. Z A/C   13 3,000
                  68,600
       
       
        68,600         68,600
       
       

Pass Book (A copy of depositor's account in banks ledger)

Date

Particulars

Debit (withdrawals) Credit (deposits) Balance

 

1.1.05 Cash   80,000 80,000
3.1.05 (Mr. N) Check No....... 8,000   72,000
5.1.05 (Mr. S) Check No.......   16,000 88,000
8.1.05 Cash: Check No....... 6,000   82,000
10.1.05 Check No.......paid 10,000   72,000
14.1.05 Bank charges 400   71,600
17.1.05 (Mr. Z) Check No....... 3,000   68,600
         

It may be noted that the cash book is showing a debit balance (cash at bank) or $68,600 and the pass book (depositor's A/C) is showing a credit balance of $68,600. Both balances are equal but opposite generally these two balances do not agree. To understand the reasons of disagreement, read our causes of disagreement between cash book and pass book article.

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More study material from this topic:

Preparing a bank reconciliation statement
Difference between cash book and pass book
Causes of disagreement between cash book and pass book

 

 
 

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Financial Accounting Topics


  Introduction to Accounting
 ----------------------------------------------------------------------------
  Transactions and Accounting Equation
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  Analysis of Business Transactions
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  Journal, Ledger and Trial Balance
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  Accounting for Bills of Exchange
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  Special Journals
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  Cash Book
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Bank Reconciliation Statement
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  Final Accounts
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  Work Sheet
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  Capital and Revenue Items
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  Valuation of Inventories
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  Accounts of Non-profit Making Organizations
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  Statement of Cash Flows
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  Accounting Ratios Analysis
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  Depreciation, Provisions and Reserves
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  Accounting Dictionary
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  Financial Calculators
 
 
 
Managerial Accounting Topics

  Financial Statements
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  Cost Volume Profit Relationship
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  Variable Costing System
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  Materials and Inventory Cost Control
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  Activity Based Costing System
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  Standard Costing and Variance Analysis
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  Balanced Scorecard
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  Capital Investment Analysis/Capital Budgeting
 
 

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