Bank Reconciliation Statement (BRS) Vocabulary

Vocabulary flashcards covering key terms, definitions, and causes of balance differences between cash books and passbooks based on the Bank Reconciliation Statement notes.

Bank Reconciliation Statement

A summary document that shows the recorded bank account balance of the company matches the balance recorded by the bank.

Bank Overdraft

A flexible, short-term credit facility given to current account holders that allows them to withdraw more money than their account balance, up to a pre-approved limit.

Passbook

A bank-issued record of all transactions for a customer's account, including deposits, withdrawals, and earned interest, updated at the bank.

Favourable Balance

A surplus of funds where more money is available than spent, appearing as a debit in the Cash Book or a credit in the Passbook.

Unfavourable Balance

A deficit of funds where withdrawals exceed deposits (overdraft), appearing as a credit in the Cash Book or a debit in the Passbook.

Cheques Issued but Not Yet Presented for Payment

Cheques issued to a creditor and recorded on the credit side of the bank column of the cash book, but not yet debited by the bank.

Cheque Paid into the Bank for Collection but Not Yet Credited

Cheques deposited into the bank and recorded on the debit side of the cash book, but not yet credited to the firm's account by the bank.

Cheques Dishonoured by the Bank

Deposited cheques recorded on the debit side of the cash book for which the bank fails to collect payment, leaving no credit entry in the passbook.

Interest Allowed by the Bank

Interest credited to the firm's account by the bank that increases the passbook balance prior to an entry being made in the cash book.

Direct Payment Through Bank

Standing-order payments (such as insurance premiums, rent, or electricity bills) made directly by the bank on behalf of an account holder, which debit the account.

Direct Payment into the Bank by a Customer

An amount deposited directly into a firm's bank account by a customer, creating a credit entry in the passbook before it is recorded in the cash book.

Demat Services

Services enabling shares, debentures, and bonds to exist and be traded in electronic form rather than paper form.