Prepare bank reconciliation statement as per pass book.
1)Bank collected a cheque of 500 on behalf of shri krishnan but wrongly credited it to shri krishnan's account.
Hi Simran
We believe that Rs 500 collected on behalf of Shri Krishnan was wrongly credited to Shri Krishna's Account.
Here, instead of crediting (increasing) Shri Krishnan's Account balance, a person with similar name has been credited. That means, pass book balance (of Shri Krishnan) remains unaffected. While the cash book balance was increased with Rs 500 (since the cheque was deposited into the bank, that is why, it was supposed to be collected).
So, Cash book balance > Pass Book balance
When balance as per Cash Book is the starting balance, it will be subtracted
When balance as per Pass Book is the starting balance, it will be added
Hope this clarifies your doubt!!
We believe that Rs 500 collected on behalf of Shri Krishnan was wrongly credited to Shri Krishna's Account.
Here, instead of crediting (increasing) Shri Krishnan's Account balance, a person with similar name has been credited. That means, pass book balance (of Shri Krishnan) remains unaffected. While the cash book balance was increased with Rs 500 (since the cheque was deposited into the bank, that is why, it was supposed to be collected).
So, Cash book balance > Pass Book balance
When balance as per Cash Book is the starting balance, it will be subtracted
When balance as per Pass Book is the starting balance, it will be added
Hope this clarifies your doubt!!