How do we treat discount allowed and discount recieved while dealing with BANK RECONSILATION STATEMENT. .
Pls explain in detail and also help in solving the following treatments in BRS
1)Discount allowed was recorded in bank column of the cash book on the debit side
2) Discount recieved from a supplier 203 was recorded in bank column of cash book with 302
Pls give reasons for the same
Dear Student,
Discount allowed means discount given to the Debtors by us. While, discount received is given by Creditors to us.
BRS is done to match the balance of Cash Book with that of the Pass Book.
In BANK RECONCILIATION STATEMENT treatment will depend upon by taking whose balance we are calculating (i.e., Cash book or Pass Book).
The below treatment are solved by taking balance as per cash book :-
(1) It is assumed that discount was allowed in cash and wrongly recorded in Bank column. Therefore, it will be added in the cash book.
(2) As cash book is overwritten by Rs. 99. It will be deducted from the cash book.
Regards
Discount allowed means discount given to the Debtors by us. While, discount received is given by Creditors to us.
BRS is done to match the balance of Cash Book with that of the Pass Book.
In BANK RECONCILIATION STATEMENT treatment will depend upon by taking whose balance we are calculating (i.e., Cash book or Pass Book).
The below treatment are solved by taking balance as per cash book :-
(1) It is assumed that discount was allowed in cash and wrongly recorded in Bank column. Therefore, it will be added in the cash book.
(2) As cash book is overwritten by Rs. 99. It will be deducted from the cash book.
| SNo. | Particulars | + items | - items |
| Balance as per Cash Book | xxx | ||
| (1) | Discount allowed wrongly recorded in cash book | xxx | |
| (2) | Discount received from supplier recorded at high amount | xxx |
Regards