Bank Reconciliation: Cash Book and Overdraft Examples

Work through Class 11 bank reconciliation numericals, including a favourable balance, an overdraft, an adjusted cash book and a reverse check.

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Topic	Exam Prep
Read time	5 min
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Published	15 Nov 2026
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A cheque has been issued, but the bank has not paid it yet. Should you add it or subtract it in a bank reconciliation statement? The answer depends on the starting book. Memorising an add-less list without naming that book is where a straightforward Class 11 numerical can go wrong.

Use the bank column of the cash book, not its cash column. Compare it with the passbook or bank statement on the same date. The examples below use original practice figures, not actual customer accounts.

Read the balance before choosing a sign

In the business's cash book, a debit bank balance is favourable; a credit bank balance is an overdraft. In the passbook, the bank's viewpoint reverses those labels: a credit balance is favourable and a debit balance is an overdraft.

For the calculations here, write favourable balances as positive and overdrafts as negative. This is a calculation method, not a replacement for the format your teacher requires. A result of minus Rs 10,000 means an overdraft of Rs 10,000, not an unexplained negative deposit.

Work from cash book to passbook

Ask whether the bank's recorded balance is higher or lower than the cash book because of each item. For these cases, the cash book has already recorded the cheque, while the stated bank-only entries have not reached it.

Table 1: scroll horizontally to see all columns.

Difference at the reconciliation date	Effect when moving to passbook
Cheque issued but not presented	Add: bank has not paid it
Cheque deposited but not credited	Subtract: bank has not received the credit
Bank charges not entered in cash book	Subtract: bank has deducted them
Interest credited only by bank	Add: bank has recorded the receipt
Standing-order payment recorded only by bank	Subtract: bank has paid it

These directions also work with a signed overdraft. Adding Rs 5,000 to minus Rs 12,000 reduces the overdraft to Rs 7,000. It does not increase the amount owed.

Example 1: favourable cash-book balance

At the reconciliation date, the cash book shows a debit bank balance of Rs 24,000. Cheques issued but not presented total Rs 6,000. Deposited cheques awaiting credit total Rs 4,500. The bank has deducted charges of Rs 300, credited interest of Rs 800 and paid insurance of Rs 1,200. Those last three items are absent from the cash book.

Passbook balance = 24,000 + 6,000 - 4,500 - 300 + 800 - 1,200 = Rs 24,800.

The answer is a favourable passbook credit balance. Explain the Rs 6,000 addition: the cash book has reduced its balance for the issued cheques, but the bank has not yet reduced its own record. That explanation is more useful than remembering that issued cheques are always added. They are not always added when the starting book changes.

Use an adjusted cash book without counting twice

If asked to prepare an adjusted cash book first, record the missing bank charges, interest and insurance there. For Example 1, the adjusted balance is:

24,000 - 300 + 800 - 1,200 = Rs 23,300.

Now reconcile only the outstanding timing differences: 23,300 + 6,000 - 4,500 = Rs 24,800. The result agrees with the direct method. Do not deduct the charges or insurance again in this second statement. They are already included in its starting balance.

Outstanding issued and deposited cheques stay as reconciliation items here because the cash book has already recorded them correctly. A cash-book error is different: correct the business's own error when adjusting that book. Do not change a correct cash-book entry merely to match a bank error.

Example 2: start with an overdraft

A separate question gives a cash-book credit balance of Rs 12,000. Issued cheques of Rs 5,000 remain unpresented; deposited cheques of Rs 3,200 remain uncredited. Bank charges of Rs 250 and bank interest received of Rs 450 have not been entered in the cash book.

Start with minus Rs 12,000, then apply the same cash-book-to-passbook directions:

-12,000 + 5,000 - 3,200 - 250 + 450 = -10,000.

Therefore, the passbook shows an overdraft of Rs 10,000, a debit balance. The unpresented cheques make the bank's overdraft smaller than it otherwise would be, because the bank has not paid them.

Reverse-check the starting balance

To move from passbook back to cash book, reverse every adjustment. Example 2 checks as -10,000 - 5,000 + 3,200 + 250 - 450 = -12,000. Label both book and balance type before finishing. If account entries themselves feel uncertain, our commerce tuition guide can help you plan support for the basics.

Frequently asked questions

Is a passbook debit balance an overdraft?

Yes. In these bank-account questions, a passbook debit balance indicates an overdraft; a credit balance is favourable.

Are unpresented cheques always added?

No. Add them when moving from cash book to passbook using signed balances. Reverse that adjustment when moving back.

Do bank charges appear twice after adjustment?

No. Once recorded in the adjusted cash book, do not deduct the same charges again when reconciling its balance.

Does a BRS record journal entries?

No. A bank reconciliation statement explains differences. Required cash-book corrections are recorded separately in the books.

Sources

NCERT Financial Accounting Part I, Chapter 5: balance types, timing differences and reconciliation methods.
CBSE Accountancy curriculum file for 2026-27: bank reconciliation scope.