(iii) Interest and Dividends Received by the Bank: In other words, the balance shown by the bank column of the cash book would be higher than the balance shown by the bank statement to the extent of amount of cheques not cleared or collected. In this intervening period, the bank statement issued by the bank definitely shows lower bank balance than the balance shown by the bank column of cash book. Usually, two to three days are taken in clearing of local cheques and in the case of outstation cheques it takes four to five days for clearing the cheques. But the account of the business enterprise will be credited by the bank only after these cheques have been collected through the clearing process. The business enterprise immediately debits the bank column of the cash book after depositing the cheques with bank. (ii) Cheques Paid into the Bank but not yet Collected by the Bank: In other words, the balance shown by the bank column of cash book would be lower than the balance shown by the bank statement to the extent of cheques not presented for payment. In this intervening period, the bank statement issued by the bank definitely shows higher bank balance than the balance shown by the bank column of cash book.
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