Amended Cash Book – Preparation
After preparing BRS, you discover items that were in Pass Book but NOT in your Cash Book. Now what?
Update your Cash Book! This updated version is called Amended Cash Book or Adjusted Cash Book.
When to Prepare Amended Cash Book?
When you find items that:
- Are in Pass Book
- NOT yet recorded in Cash Book
- Should have been recorded
Items Requiring Amendment
| Item | Action in Cash Book |
|---|---|
| Bank charges | Credit Bank column |
| Interest credited | Debit Bank column |
| Direct deposit by customer | Debit Bank column |
| Standing instruction payment | Credit Bank column |
| Dishonored cheque | Credit Bank column |
| Interest on overdraft | Credit Bank column |
| Dividend collected | Debit Bank column |
Items NOT Requiring Amendment
| Item | Why Not? |
|---|---|
| Cheque issued not presented | Already in Cash Book |
| Cheque deposited not cleared | Already in Cash Book |
| Errors by bank | Bank will correct, not our error |
Solved Example
Original Cash Book (Bank Column):
| Date | Particulars | Amount | Date | Particulars | Amount |
|---|---|---|---|---|---|
| Apr 01 | To Balance b/d | 50,000 | Apr 15 | By Rent | 5,000 |
| Apr 10 | To Sales | 20,000 | Apr 30 | By Balance c/d | 65,000 |
| Total | 70,000 | Total | 70,000 |
Items discovered from Pass Book:
- Bank charges ₹200
- Interest credited ₹500
- Direct deposit by customer ₹10,000
- Cheque issued ₹3,000 not yet presented (ignore for amendment)
- Insurance premium auto-debited ₹2,000
Amended Cash Book (Bank Column):
| Date | Particulars | Amount | Date | Particulars | Amount |
|---|---|---|---|---|---|
| Apr 01 | To Balance b/d | 50,000 | Apr 15 | By Rent | 5,000 |
| Apr 10 | To Sales | 20,000 | Apr 30 | By Bank Charges | 200 |
| Apr 30 | To Interest | 500 | Apr 30 | By Insurance Premium | 2,000 |
| Apr 30 | To Customer (Direct) | 10,000 | Apr 30 | By Balance c/d | 73,300 |
| Total | 80,500 | Total | 80,500 |
New Balance: ₹73,300 (increased from ₹65,000)
Explanation:
- Added: Interest ₹500 + Direct deposit ₹10,000 = +₹10,500
- Deducted: Bank charges ₹200 + Insurance ₹2,000 = -₹2,200
- Net effect: +₹8,300
- New balance: ₹65,000 + ₹8,300 = ₹73,300 ✅
Step-by-Step Process
Step 1: Start with original Cash Book balance
Step 2: Add items that increase bank balance:
- Interest credited
- Direct deposits
- Dividend collected
Step 3: Deduct items that decrease bank balance:
- Bank charges
- Interest on overdraft
- Standing instruction payments
- Dishonored cheques
Step 4: Calculate new balance
Step 5: This new balance should match Pass Book balance (after considering timing differences)
Quiz
Test Your Knowledge
Question 1 of 5
1. Amended Cash Book is prepared to record:
💡 Final Wisdom: "Amended Cash Book = Updated Cash Book. It's like updating your phone's contact list after getting new numbers!"