JAIIB | ACCOUNTING AND FINANCIAL MANAGEMENT (AFM) | CASE STUDY ON CAUSES OF DIFFERENCE IN CASH BOOK AND PASS BOOK

The Junior Associate of Indian Institute of Bankers (JAIIB) certification tests banking professionals on critical financial concepts to enhance their understanding of day-to-day banking operations. One such significant topic in the Accounting and Financial Management (AFM) module is the Cause of Difference in Cash Book and Passbook. Learning Sessions presents this article on the case study on the concept that is important for professionals involved in reconciliation processes, as it directly impacts financial accuracy and transparency.

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The Cash Book is maintained by a bank or a business to record its cash transactions, including receipts and payments.
The Passbook is maintained by the bank on behalf of the account holder, detailing transactions from the bank’s perspective.

Despite both serving as transaction records, differences between the two often arise due to timing, errors, or incomplete information.

For the extensive preparation of candidates, get details through our YouTube videos for JAIIB AFM Module wise Syllabus with explanations and tips to help candidates in their preparation journey.

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Major differences:

1. Cheques Issued but Not Presented
   • When a cheque is issued by the account holder but not presented for payment, it reflects as a debit in the cash book but does not appear in the passbook until cleared.
2. Cheques Deposited but Not Credited
   • A cheque deposited into the bank is recorded in the cash book immediately. However, if the bank hasn’t cleared the cheques, it will not appear in the passbook.
3. Bank Charges or Interest
   • Banks deduct charges or add interest to the account without immediate notification, causing a mismatch.
4. Direct Deposits or Payments
   • Direct payments into the account or standing instructions executed by the bank appear in the passbook but are recorded in the cash book later.
5. Errors in Recording
   • Mistakes like omissions or incorrect amounts in either the cash book or passbook can create discrepancies.

To summarize, The Cause of Difference in Cash Book and Passbook topic in the JAIIB’s AFM module equips banking professionals with the skills to manage discrepancies in transaction records efficiently. Mastering this concept enhances financial reporting accuracy and ensures smooth banking operations. Learning Sessions provides additional information about JAIIB AFM LEASE FINANCE by giving examples of real life scenarios.

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