When I was in school, my father used to ask me to deposit interest or dividend cheques in the bank. Before going to bank, we used to write entry of the cheque in a notebook at home and also the date cheques was deposited in the bank. When I get pass book entries, I used to write in the same notebook the date the cheque was credited to the account. My observation was bank credited some cheques on the same day of deposit and some with a delay of a day or two. I had another experience with the cheque send with IPO application. Though the pass book showed more money balance in the bank, my father used to ingore passbook balance and look at “Cheques Issued” sheet at the end of the cheque book and every time he issues cheque, he used to calculate the correct balance based on “Cheques Issued” sheet.
My father used to explain me that the difference between balance’s in back passbook and balance’s in my notebook is quite normal and this was due to the time lag between when transactions were recorded in passbook and when in the note book at home.
In the later years in my accounting class, I was surprised to learn the above concept as Bank reconciliation and understood the concept with ease. This was not east to my batch-mates who lacked my exposure. How to train/teach Bank reconciliation to the student who lacks real exposure?
In arthavidhya, I was instrumental in simulating the concept called Bank reconciliation process and the bank ledger and bank passbook statements. A difference in recorded dates was introduced explicitly between the record date of the transaction in bank ledger and corresponding one in bank passbook. Then, we generated passbook and ledger from the start date of account in the bank to the date of process execution, resulting in to long set of transactions that were larger to comprehend for students.
To simplify the process, the statements are split in to manageable time periods of say 10 days for which passbook statement and bank is generated and the student is made to perform BRS for this period. When the student completed BRS for this period of 10 days, the student is enabled to perform BRS process of the next period of 10 days to the date of process execution.