Which of the following is correct sequence to prepare the bank reconciliation statement?

(A) The cheques deposited but not yet collected are deducted.

(B) The net balance shown by the statement should be same as shown by the passbook.

(C) The first item in the statement is generally the balance as shown by the cash book.

(D) The date on which the statement is prepared is written at the top, as part of the heading.

Choose the correct answer from the options given below.

(D), (C), (A), (B)

The correct answer is option 3- (D), (C), (A), (B).

The following steps may be initiated to prepare the bank reconciliation statement:

(D) The date on which the statement is prepared is written at the top, as part of the heading- Firstly the heading is written to prepare Bank reconciliation statement.

(C) The first item in the statement is generally the balance as shown by the cash book. Alternatively, the starting point can also be the balance as per passbook- This step involves identifying the starting balance from either the company's records (cash book) or the bank's records (passbook). This balance serves as the initial point for reconciliation.

(A) The cheques deposited but not yet collected are deducted. If any other adjustments are required then it is also done- Here, outstanding deposits (cheques deposited but not yet cleared by the bank) are adjusted. Additionally, any other necessary adjustments, such as bank charges or interest earned, are taken into account.

(B) Now the net balance shown by the statement should be same as shown by the passbook- Finally, after adjusting for all items like outstanding cheques, bank charges, and any other differences between the cash book and passbook, the reconciled balance (net balance) should match the balance shown in the passbook (bank statement).