Transactions that Usually Appear in the Cash Book, but not in the Pass Book

When you compare the cash book entries with their corresponding entries in the pass book, you will find a number of transactions which appear in the cash book but not in the pass book. Such transactions have been discussed below.

a)Cheques deposited into bank but not yet collected: When a payment is received by cheque, the firm sends it to the bank for collection and records it immediately on the debit side of the cash book. This increases the bank balance as per cash book. But the bank will not credit the firm's account till the cheque is actually collected. So, the balance in the pass book remains unaffected till the proceeds of the cheque are collected and credited. Thus, on a particular date, it is possible that certain cheques which were sent for collection might not have been collected by the bank and so not shown in the pass book. All such cheques pending collection would make the cash book balance different from the pass book balance. For example, the firm sends a cheque of Rs. 2,000 on December 28, to the bank for collection. The cheque is collected on January 6. Now, if the balances as on December 31 are compared, they will be different because the credit of Rs. 2,000 will not appear in the pass book by December 31.

b)Cheques issued but not yet presented for payment: Whenever a payment is made by cheque, the cash book is immediately credited. This reduces the balance in the cash book. But, it would always take some time before those cheques are actually presented for payment. The bank would debit the firm's account only when it actually pays the cheques. Hence, on a particular date, if there are some cheques still to be presented for payment, the pass book will not show their entries. Consequently, the balance in the pass book will be higher than the balance as per cash book on that date.