Bank Reconciliation statement (BRS)

Bank reconciliation statement is the statement which contain a complete and satisfactory explanation of the differences in balances as per the cash book and bank statement.The preparation of BRS is not part of the double entry bookkeeping system.It is just a procedure to prove the cash book balance.

It should be noted that:

(a) a BRS is to be prepared whenever a bank statement received; and

(b) It is prepared on a stated day.

Need for Bank reconciliation statement

1. It reflects the actual bank balance position

2. It helps to detect any mistake in the cash book and in the pass book

3. It prevents frauds in recording the banking transactions.

4. It explain any delay in collection of cheques 

5. It identifies valid transactions recorded by one party but not by the other.

In short BRS is the auditing tool for management.