Free Essay

Bank

In: Business and Management

Submitted By saffan
Words 3838
Pages 16
LESSON 14: CASH BOOK, PASS BOOK, BANK RECONCILIATION STATEMENT
Dr. Jyotsna Sethi, Rekha Rani

STRUCTURE
14.1 Introduction 14.2 Objectives 14.3 Cash Book 14.4 Types of Cash Book 14.4.1 Simple Cash Book 14.4.2 Two Column Cash Book 14.4.3 Three Column Cash Book 14.5 Petty Cash Book. 14.5.1. Imprest System of Petty Cash Book. 14.5.2 Advantages of Petty Cash Book 14.6 Pass Book 14.7. Bank Reconciliation Statement 14.7.1 Meaning 14.7.2. Causes for difference between Cash Book Balance and Pass Book Balance. 14.7.3. Need and importance of Bank Reconciliation Statement 14.7.4 Procedure for preparation of Bank Reconciliation Statement. 14.8. 14.9. Summary Glossary

14.10. Self Assessment Questions 14.11. Answer to check your progress 14.12. Further Readings

14.1. INTRODUCTION
Every entrepreneur should have knowledge of cash book and pass book as from these books, he may check how much balance is available to him for meeting his expenses and liabilities and what are the details of receipts and payments of a particular period. With the details of payments it can be checked that whether the payments are of reasonable amount or not. If the expanses are unreasonably high he may take steps to control them. An

211

entrepreneur who regularly checks his cash and bank balances would never face problems like dishonor of cheques or cash crisis etc. Entrepreneur, who doesn’t distinguish between his revenue and profits, may spend all his receipts for his personal purposes subsequently resulting in deficiency of cash for business purposes and lead to cash crisis.

14.2. OBJECTIVES
After going through this lesson you should be able to Explain the meaning of Cash Book, Pass Book, and Petty Cash Book. Discuss the types of cash book. Enter the transactions in Cash Book. Explain the meaning, need and importance of bank reconciliation statement. Discuss the causes for difference between the balances of Pass Book and Cash Book. Prepare bank reconciliation statement.

14.3 CASH BOOK
In business most of the transactions relate to receipt of cash, payments of cash, sale of goods and purchase of goods. So it is convenient to have separate books for each such class of transaction, one for receipts and payments of cash, one for purchase of goods and one for sale of goods. These books are called subsidiary books. Cash book is a subsidiary book which records the receipts and payment of cash. With the help of cash book cash and bank balance can be checked at my point of time. (Ref.: T.S. Grewal, “Double Entry Book Keeping”)

14.4. TYPES OF CASH BOOK
Cash book can be of four types: 1. Simple Cash Book. 2. Two column cash book. 3. Three column cash book. 4. Petty cash book

14.4.1 SIMPLE CASH BOOK
A simple cash book is prepared like any ordinary account. The receipts are recorded in the Dr Side and the payments are recorded in the Cr side of the cash book. The specimen Performa of a simple cash book is given as follows: 211

Simple Cash Book Dr. Date Receipts Particulars Amt. Rs. Date Payments Particulars Cr. Amt Rs.

Balancing the Cash Book The Cash book is balanced like any other account. The receipts column total will be more than the payments column total. The difference will be written on the Cr. Side as “By Bal c/d”. Example 1 Enter the following transactions in a simple cash Book. 2006 Jan 1 Jan 5 Jan 7 Jan 8 Jan 10 Cash in hand Received from Ram Paid Rent t Sold goods Paid Shyam Rs. 12,000 3,000 300 7000 2000 Simple Cash Book Dr. Date 2006 Jan 1 Jan 5 Jan 8 Receipts Particulars To Bal b/d To Ram To Sales Amt. Rs. 12,000 3,000 7,000 22,000 Date 2006 Jan 7 Jan 10 Jan 31 Payments Particulars By Rent By Shyam By Bal C/d Cr. Amt Rs. 300 2,000 17,000 22,000

Check your progress
Activity I

Find out the monthly expenses and incomes of your family and prepare a cash book for a particular month. ………………………………………………………………………………… ………………………………………………………………………………… 212

………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… Q 1. Enter the following transactions in the simple cash book. 2005 Dec 1. Dec 2 Dec 3 Dec 4 Dec 5 Dec 6 Cash in Hand Received from Ramesh Purchased Furniture Machinery Sold Goods sold Salaries paid Rs. 10,000 13,000 15,000 10,000 20,000 1,000

………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… …………………………………………………………………………………

14.4.2. TWO COLUMN CASH BOOK
A two – column cash back records discount allowed and discount received along with the cash payments and cash receipts. Discount allowed is the concession given by the businessman to its customers or debtors e.g. if a debtor has to pay Rs. 10,000 and he is allowed 10% discount, now he will pay only Rs. 9000 to the firm. This is called discount allowed, it is a type of loss for the business so it is to be debited and recorded in Dr. Side of the cash book. Discount received is the concession received by the business man from the creditors. e.g. if a firm has to pay Rs. 50,000 to its creditors and discount received is 20% then the firm has to pay only Rs. 40,000 to the creditor. This is called discount received, it is a gain or profit for the firm so it is to be credited and recorded in the Cr. side of the cash book the specimen Performa of a two column cash Book is given as under – Two column Cash Book Dr Date Receipts Particulars Amount Dis. Amount Cash Date Payments Particular Amt. Dis. Cr Amt. Cash

213

Note: Discount columns are not balanced they are merely totaled. Example 2: Enter the following transactions in a two column ash Book. 2005 Jan 1 Jan 5 Jan 5 Jan 6 Jan 10 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Cash in hand Paid to Ram Discount allowed by him Purchased goods Received from R. Gupta Discount allowed Sold goods Paid to S. Sharma Discount received Rs. 50 Paid wages Paid to Naresh in full settlement of his Account which shows a Cr. Balance of Rs. 4000 Two Column Cash Book Dr
Date 2005 Jan 1 Jan 10 Jan 11 To Bal b/d To R. Gupta To sales Particulars

Rs. 15,000 3,000 100 4,000 9,800 200 4,000 2,950 50 500

3900

Receipts
Amt Dis. Rs 200 Amt Cash Rs 15,000 9,800 4,000 Date 2005 Jan 5 Jan 6 Jan 12 Jan 13 Jan 14 Jan 31 200 28,800

Payments
Particulars Amt Dis. 100 50

Cr
Amt Cash 3,000 4,000 2,950 500 100 3,900 14,450 250 28,800

By Ram Purchases By S. Sharma By Wages By Naresh By Bal c/d

Check your progress Q 2. X started business on 1.4.2005 with Rs. 20,000 as Capital. He had following cash transactions in the month of April 2005.

214

2005
April 1 April 2 April 3 April 4 April 5 Purchased Furniture Purchased Goods Sold Goods for Cash Purchased Goods Paid Cash to Ram Discount allowed by him April 6 Received Cash Krishna andCo. Allowed Discount from

Rs. 2005
2,500 3,000 1,500 2,000 5,600 100 April 7 April 8 April 9 April 10 April 11 April 12 April 13 6,000 200 Paid for petty exp. Cash Purchases Cash Sales Recd from Mohan Bros. Paid for Typewriter Paid for Telephone Paid Ali and Sons They allowed dis.

Rs.
150 1,500 2,000 6,000 8,000 2,000 4,000 80

Make out two column cash Book ………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………...

14.4. 3 THREE COLUMN CASH BOOK
A three column cash Book is a cash book which contains bank along with cash and discount columns. column

A firm normally keeps the bulk of its funds at a Bank; money can be deposited and withdrawn at will if it is a current account. Probably payments into and out of the bank will be more numerous than strict cash transactions. They’re in only a little difference between cash in hand and cash at bank. Therefore it is very convenient if in the cash book on each side another column is added – to record moneys deposited at bank and payments out of the bank. The specimen Performa of a three column cash book is given as under: Three Column Cash Book Dr
Date Particular

Receipts
Dis. Rs. Cash Rs. Bank Rs. Date

Payments
Particulars Dis. Rs. Cash Rs.

Cr
Bank Rs.

Balancing: The discount columns are totaled but not balanced. The cash columns are balanced exactly in the same manner as indicated for the simple

215

cash book. The process is similar for balancing the bank columns also. It is possible, however, that the bank may allow the firm to withdraw more than the amount deposited, i.e. to have an overdraft. In such a case the total of the bank column on the credit side will be bigger than the one on the debit side. The difference is written on the debit side as “To Bal c/d”. Then the totals are written on the two sides opposite one another; the balance is then entered on the credit side as “By Bal b/d”. However the usual case is that payments into the bank will exceed the withdrawals or payments out of the bank. Then the bank columns are balanced just like the cash columns. (Ref.: T.S. Grewal, “Double Entry Book Keeping”) Example 3: Enter the following transactions in a Three-column cash book. Cheques are first treated as cash receipts 2005 Jan 1 Jan 2 Jan 3 Jan 4 Jan 5 Cash in hand Paid into Bank Receives cheques from Kirti and Co. Pays into bank Kirti and Co’s Cheque He pays Ratan and Co. by Cheque and is allowed discount of Rs. 20 Rs. 20,000 19,000 600 600 330

Solution Three Column Cash Book Dr
Date 2005 Jan 1 Jan 2 To Bal b/d To Cash A/C (C) To Kirti and Co To Cash A/C (c) Particular

Receipts
Dis. Rs. Cash Rs. 20,000 Bank Rs. Date 2005 19,000 Jan 4 600 Jan 5 By Bank A/C (c) By Ratan and Co (c) By Bal C.d Jan 2 By Bank A/C (c) Particulars

Payments
Dis. Rs. Cash Rs. 19,000

Cr
Bank Rs. -

20 -

600 330

Jan 3

Jan 4

-

20,600 600 19,600

Jan 31

20

1000 20,600

18670 19,600

216

Note 1) When cash is paid into bank the entry passed is Bank A/C Dr. To Cash A/C (Bank balance increased) (Cash balance decreased)

This type of transaction affects both cash and bank, these are called contra transactions 2) When cheque is received two entries are passed Cash A/C Dr. To Debtors Bank A/C Dr. To Cash Check your progress Q 3. Enter the following transactions into a three column cash book. 2005 Feb 1 Feb 2 Feb 3 Feb 4 Cash in hand Receives cheques from Warsi and allows him discount Rs. 300 Pays by cheque for cash purchases Sundry exp. paid in cash 4,700 2,000 500 Rs. 10,000 (When cheque is deposited into Bank) (When cheque is received)

………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… …………………………………………………………………………………

14.5 PETTY CASH BOOK
A business house makes a number of small payments like telegram, textiles, cartage etc. If all these transactions are recorded in cash book the cash bank may become bulky and the main cashier’s work will also increase therefore usually firms appoint a petty cashier who makes these small payments and keep record of these payments in a separate cash book which is called Petty Cash book.

14.5.1. IMPREST SYSTEM OF PETTY CASH BOOK.
The petty cashier is given a sum of money in the beginning of the period. During the period he makes payment out of this money. At end the firm reimburses him the amount paid by him so that the balance of cash with him 217

remains same in the beginning of the period as well as at the end of the period. This is called the Imprest system of petty cash Book. The specimen Performa of a petty cash book is given as under. Petty Cash Book
Receipts Date Voucher No. Particular Total Conveyance Cartage Stationery Postage and Tele Gram Sundries

Example 4 Prepare a petty cash book on the Imprest system from the following: 2005 March 1 March 2 March 3 March 4 March 5 March 6 March 7 Solution Petty Cash Book
Recei pts Date V . N o. Particulars Total Rs. Con veya nce Cart age Station ary Postage Telegra m Sundries

Rs. Received Rs. 1000 for petty cash Paid bus fare Paid Cartage Paid for postage and telegram Paid for stationery Paid for postage and telegram Paid for sundry exp. 10 25 50 40 50 40

2005 1000 March-1 March-2 March-3 March-4 March-5 March-6 March-7 1 2 3 4 5 6 7 To Cash A/C By conveyance By cartage By postage telegram By stationary By postage telegram and and 10 25 50 40 50 40 10 25 40 50 50 -

-

40

218

By sundry exp.

1000

March 31

By Bal c/d

215 785

10 ===

25 ===

40 ====

100 ====

40 ====

====

====

785 215

April 1

To Bal b/d To Cash

14.5.2. ADVANTAGES OF PETTY CASH BOOK
There are mainly four advantages: (i) (ii) Saving of time – Saving of time of the chief cashier. Saving of labour – saving in labour in writing up the cash book.

(iii) Control – It provides control over small payments. (iv) Convenience in preparing ledger amounts. (Ref.: T.S. Grewal, “Double Entry Book Keeping”) Check your progress Q 4. Prepare a Petty cash book on the Imprest System. From the following: 2005 Jan 1 Jan 2 Jan 3 Jan 4 Jan 5 Received Rs500 for Petty Cash Paid bus fare Paid for stationery Paid for postage and telegrams Paid for Cartage 20 130 170 100

………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… …………………………………………………………………………………

14.6 PASS BOOK
Pass Book is a book issued by Bank to an accountholder. It is almost a copy of the account of the customer in the books of bank. The bank keeps the customer informed of the entries made in his account through Pass Book. It is the customer’s duty to check the entries and immediately inform the bank of any error that he may have noticed. The form of the Pass Book is given as below

219

PASS BOOK Messers ……………………………… Date Particulars Withdrawals Deposits Dr Cr. Dr or Cr Balance

Check you progress Activity 2 Find out what are the similarities and dissimilarities between a Cash Book and Pass Book. ………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………….

14.7 BANK RECONCILIATION STATEMENT
It may be illustrated under following heads

14.7.1. MEANING
The cash Book and Pass Book are prepared separately. The Businessman prepares the Cash Book and the Pass Book is prepared by the Bank (here by cash book we mean three column cash Book). But as both the books are related to one person and same transactions are recorded in both the books so the balance of both the books should match i.e. the balance as per Pass Book should match to balance at bank as per cash book. But many a times these two balances do not agree then, it becomes necessary to reconcile them by preparing a statement which is called Bank Reconciliation Statement. A BANK RECONCILIATION STATEMENT may be defined as a statement showing the items of differences between the cash Brook balance and the pass book balance, prepared on any day for reconciling the two balances.

14.7.2 CAUSES FOR DIFFERENCES
A transaction relating to bank has to be recorded in both the books i.e. Cash Book and Pass Book but sometimes it happens that a bank transaction is recorded only in one book and not recorded simultaneously in other book this

220

causes difference in the two balances. The causes for difference may be illustrated in detail as follows: Causes 1. Cash Book Pass Book No entry is made till the cheques are presented for payment. Balance= Same as before No entry is made till the cheques are cleared Balance = same Entry is made

2.

3.

4.

5.

6.

7.

8.

9.

10

Cheques issued but Entry is made not yet presented for payment Balance =Decreased Cheques paid into Entry is made the bank but not yet cleared. Balance = Increased Interest allowed No entry is made till by the Bank the Pass Book is checked Balance = Same Interest and No entry is made till Expenses Charged the Pass Book is by the Bank checked Balance = Same Interest and No entry is made till dividends collected the Pass Book is by Bank checked Balance = Same Direct payments by No entry is made till the bank the Pass Book is checked Balance = Same Direct payments No entry is made till into the bank by a the Pass Book is customer checked Balance = Same Dishonor of a bill No entry is made till discounted with the the pass Book is bank checked Balance = Same Bills collected by No entry is made till the bank on behalf the Pass Book is of the customer checked Balance = Same Errors committed either in Cash Back or Pass Book

Balance = Increased Entry is made

Balance = Decreased Entry is made

Balance = Increased Entry is made

Balance = decreased Entry is made

Balance = Increased Entry is made

Balance = decreased Entry is made

Balance = Increased

14.7.3 NEED AND IMPORTANCE RECONCILIATION STATEMENT

OF

BANK

The need and importance of the bank reconciliation statement may be given as follows: 221

1. The reconciliation process helps in bringing out the errors committed either in cash Book or Pass Book. 2. Bank reconciliation statement may also show any undue delay in the clearance of cheques. 3. Sometimes the cashier may have the tendency of cheating like he may made entries in the Cash Book only but never deposit the cash into bank. These types of frauds by the entrepreneur’s staff or bank staff may be detected only through bank reconciliation statement. So this way bank reconciliation statement acts as a control technique too. (Ref.: T.S. Grewal, “Double Entry Book Keeping”)

14.7.4. PROCEDURE FOR PREPARATION OF BANK RECONCILIATION STATEMENT
A. bank reconciliation statement is prepared to reconcile the two balances of Cash Book and Pass Book. So, when you will prepare a bank reconciliation statement you will start it with one balance make adjustments and then you will reach to the other balance. This way both the balances will agree. The way the adjustments should be made may be illustrated as follows: Particulars Balance at Bank as Per Cash Book Add (i) (2) (3) (4) (5) Less : (1) (2) (3) (4) Cheques paid into the bank but Xx not yet cleared Interest and expenses charged by Xx the bank Direct payment by the Bank Xx (-) xx Dishonor of a bill discounted with Xx the bank Cheques issued but not yet Xx presented for payment Interest allowed by the bank Xx Interest and dividend collected by Xx the bank Direct payments into the bank by Xx a customer Bills collected by the bank on Xx behalf of the customer (+) xx Amount Rs. Xxx

222

Balance as per Pass Book

Xxx

Note: If you start the question with balance as per pass book all the adjustments will be reversed. Example 5. : From the following prepare a bank reconciliation statement on 31st March 2005. 1. 2. 3. 4. 5 6 Balance as per Cash Book Cheques paid into Bank March 2005 but credited by the bank in April 2005 Cheques issued in March 2005 but cashed in April 2005 Cheques entered in the Cash Book in March 2005 but paid into bank in April 2005 Interest allowed by the bank Interest charged by the bank 1,80,000 7,900 11,000 1,000 2500 500

Solution Bank Reconciliation Statement As on March 31, 2005 Particulars Add. 1. 2. Less: 1. 2. 3. Balance as per Cash Book Cheques issued but not cashed Int. allowed by bank Cheques paid into bank but not cleared Cheques entered into Cash Book Interest charged by Bank Balance as per Pass Book yet 11,000 2500 7,900 1,000 500 Amount 1,80,000 + 13,500 1,93,500

9,400 1,84,100 ======

Check your progress Q. 1. Prepare a bank reconciliation statement from the following information 1. 2. 3. Balance as per pass book Cheques deposited but not yet collected Cheques 3,357 790

issued but not yet presented for 650

223

payment 4. 5. 6. 7. Expenses paid by the bank directly Bill dishonored (discounted with the bank) Commission charged by the bank Interest allowed by the bank 1,000 500 13 10

………………………………………………………………………………….. ………………………………………………………………………………….. ………………………………………………………………………………….. …………………………………………………………………………………..

14.8. SUMMARY
Cash book is the record of cash and bank transaction prepared by the entrepreneur and the pass book is the statement of accounts prepared by the bank. There are a lot of reasons due to which the balances of cash book and pass book do not match, and then bank reconciliation statement is prepared to reconcile both the balances Preparation of cash book, petty cash book and pass book helps the entrepreneur to exercise control over the expenses, the bank reconciliation statement facilitates checking of errors and frauds in these books.

14.9 GLOSSORY
Presentation of cheque – Depositing the cheque into bank for receiving payment. Clearing of cheque – Collection of the amount of cheque by the bank. Bills Receivable - An instrument in writing containing an unconditional order, signed by the maker directing a certain person to pay a certain sum of money to certain person or the bearer of the instrument. Dishonor of Bill – A situation when the acceptor of the bill refuse to pay the amount or otherwise unable to do so.

14.10 SELF ASSESSMENT QUESTIONS
Q.1 what do you mean by a petty Cash Book? What are its main advantages? Q.2 what is Bank Reconciliation Statement? Why the preparation of Bank Reconciliation statement is necessary?

224

Q.3 Explain the reasons on account of which the balance as shown by the pass book does not agree with the balance as shown by the bank column of the cash book.

14.11 ANSWER TO CHECK YOUR PROGRESS
Q-1. Cash balance = Rs. 37000 Q-2. Cash balance = Rs. 6750 Q-3. Cash balance = Rs. 9500 Cash at Bank = Rs. 2700 Q-4. Petty cash balance = Rs. 80 Q-5. Balance as per Cash Book = Rs. 5000

14.12 FURTHER READINGS
T.S. Grewal, “Double Entry Book Keeping”, Sultan Chand and sons. 28 Daryaganj, New Delhi. Jain and Narang, “Financial Accounting”. Kalyani Publishers, New Delhi.

225

Similar Documents

Premium Essay

Bank

...United Kingdom (UK) Company named NRB Community Bank which provides international recognition and credentials for fund raising and management as well as investing in Bangladesh. NRB Community Bank will focus on providing services to the High Net Worth (HNW) clients and Small & Medium Enterprises (SME) in the UK and from Bangladesh and will carry on other regulated retail bank activities as appropriate. The NRB Community Bank will go into a partnership arrangement with an existing retail bank and offer the banking services in a “white-label” arrangement where the NRB Community Bank will market and target the community in utilizing the retail banks products and services similar to what has been done by Tesco Bank and Sainsbury’s Bank. NRB Community Bank will make all the investments and acquire the retail customers from the target community and share the revenue with the retail bank partner. NRB Community Bank will be the first Bangladeshi commercial company formed and operating in the UK under the Financial Services Authority (FSA) regulations and fully transparent and accountable to the UK companies’ laws and compliances. The primary objective of the Company will be to service to the Non Resident Bangladeshis (NRB) in the UK and Europe and invest in portfolio of projects in Bangladesh that provides significant return to the investors and shareholders. NRB Community Bank will seek to provide investment products and retail bank services to the Non Resident Bangladeshi......

Words: 842 - Pages: 4

Premium Essay

Bank

...Deposit-taking institutions that accept and manage deposits and make loans, including banks, building societies, credit unions, trust companies, and mortgage loan companies; • Insurance companies and pension funds; • Brokers, underwriters and investment funds. Functions of a Financial Institution: The functions of Financial Institutions are: • Financial institutions provide service as intermediaries of the capital and debt markets. • They are responsible for transferring funds from investors to companies in need of those funds. • Financial institutions facilitate the flow of money through the economy. To do so, savings a risk brought to provide funds for loans. Such is the primary means for depository institutions to develop revenue. Should the yield curve become inverse, firms in this arena will offer additional fee-generating services including securities underwriting, and pre. Regulation Structures of Financial Institutions: Financial institutions in most countries operate in a heavily regulated environment as they are critical parts of countries' economies. Regulation structures differ in each country, but typically involve prudential regulation as well as consumer protection and market stability. Some countries have one consolidated agency that regulates all financial institutions while other have separate agencies for different types of institutions such as banks, insurance companies and brokers....

Words: 15567 - Pages: 63

Premium Essay

Bank

...services have launched by some multinationals and new local private commercial banks. Electronic banking is one of the most demanded and latest technologies in banking sector. This paper tried to unearth the present status of electronic banking in banking sector in Bangladesh. Keywords: Electronic Banking, Bank, Bangladesh Introduction: In Bangladesh, multinational banks are operating for long besides our nationalized, private and specialized banks. However, much of the resulting research has concentrated on providing evidence of the association between consumers’ usage patterns of ATMs and their demographic profiles (Hood, 1979; Murphy, 1983) and, more recently, consumer psychographic profiles (Stevens et al., 1986). Besides, the banking services of nationalized, private, and multinationals are different by quality of their services. Multinational banks are offering better services than others. They offer better customer services, personal financial services, corporate facilities, trade services with the help of efficient operational department, credit department, information technology department and the most important department is the marketing department. Presently they are thinking to offer door-to-door services, 24 hours banking services with electronic banking, pay and cash management through internet services. Moreover, waiting to introduce intensive e banking of the multinational banks in Bangladesh. Customer always demands better services, security, and round......

Words: 3626 - Pages: 15

Premium Essay

Bank

...When the business is half the world away, however, lending can be a riskier proposition. One way to resolve this issue is the use of banker’s acceptances. These are time drafts that a business can order from the bank. The financial institution promises to pay the exporting firm a specific amount on a specific date, at which time it recoups its money by debiting the importer’s account. A banker’s acceptance, or BA, works much like a post-dated check, which is simply an order for a bank to pay a specified party at a later date. The holder may choose to sell the BA for a discounted price on a secondary market, giving investors a relatively safe, short-term investment. BAs are frequently used in international trade because of advantages for both sides. Exporters often feel safer relying on payment from a reputable bank than a business with which it has little if any history. Once the bank verifies, or “accepts”, a time draft, it becomes a primary obligation of that institution. The importer may turn to a banker’s acceptance when it has trouble obtaining other forms of financing, or when a BA is the least expensive option. The advantage of borrowing is that it receives the goods and has the opportunity to resell them before making payment to the bank. Discounting the Acceptance To understand banker’s acceptances as an investment, it’s important to understand how businesses use them in global trade. Here’s one fairly typical example. An American company,......

Words: 1068 - Pages: 5

Premium Essay

Bank

...INTERNSHIP REPORT ON GENERAL BANKING ACTIVITIES OF PUBALI BANK LIMITED: A STUDY ON SADARGHAT BRANCH, DHAKA Prepared for Mr.Sheikh Md. Abdur Rahim Assistant Professor and Head Department of Real Estate and Department of Commerce Faculty of Business and Economics Daffodil International University Prepared by Rajib Dutta ID No.: 102-11-1571 th BBA 26 Batch(Major: HRM) Faculty of Business & Economics Daffodil International University Date of Submission: 7 December 2014 LETTER OF TRANSMITTAL 7 December 2014 Mr.Sheikh Md. Abdur Rahim Assistant Professor and Head Department of Real Estate and Department of Commerce Faculty of Business and Economics Daffodil International University Subject: Submission of the internship report. Dear Sir, It is my great pleasure to submit the Internship report entitled “General Banking Activities of Pubali Bank Limited: A Study on Sadarghat Branch,Dhaka’’. As per requirement of BBA, I have completed the Internship in Pubali Bank Limited. I have tried to exert all the knowledge that I gathered through my working with this branch of PBL. Working for three months (6th august to 6th November) in the Pubali Bank Limited, Sadarghat Branch helped me to fulfill the requirements of obtaining practical learning and subsequently prepare of this report. My internship in Pubali Bank Limited was a worthwhile experience and the exposure of such an organization would be valuable for me. Before facing the real business world...

Words: 8943 - Pages: 36

Premium Essay

Bank

...Different Modes of Investment of Islami Bank Bangladesh Limited [pic] Islami Bank Bangladesh Limited Date of submission: 19th May, 2011 Different Modes of Investment of Islami Bank Bangladesh Limited Kawran Bazar Branch and Its Performance Prepared By www.AssignmentPoint.com Student Declaration I hereby declare that report entitled Different Modes of Investment of Islami Bank Bangladesh Limited Kawran Bazar Branch and Its Investment Submitted in partial fulfillment of the requirement for the degree of Bachelors of Business Administration (BBA) Is my original work and not submitted for the award of any other Degree, Diploma Fellowship or other similar title or prizes ________________________________ www.AssignmentPoint.com Certification This is to certify that the internship Report titled Different Modes of Investment of Islami Bank Bangladesh Limited Kawran Bazar Branch and Its Investment Submitted in partial fulfillment of the requirement for the degree of Bachelor of Business Administration (BBA) is approved and accepted in form and quality. ________________ ____________________ Supervisor ...

Words: 16295 - Pages: 66

Premium Essay

Bank

...integral part of BBA degree requirement, I was sent to IFIC bank, Lalmatia Brunch to take real life exposure of the activities of financial institution from 01, June 2014. 1.2 Background of the Study: Modern banks play an important part in promoting economic development of a country. Banks provide necessary funds for executing various programs underway in the process of economic development. Economy of Bangladesh is in the group of world’s most underdeveloped economies. One of the reasons may be its underdeveloped banking system. Government as well as different international organizations have also identified that underdeveloped banking system causes some obstacles to the process of economic development. So they have highly recommended for reforming financial sector. Since 1990, Bangladesh Government has taken a lot of financial sector reform measurements for making financial sector as well as banking sector more transparent, and formulation and implementations of these reform activities has also been participated by different international organization like World Bank, IMF etc. I was placed in IFIC Bank Limited, for 12 weeks long Internship Program to acquire practical knowledge. This is an orientation to the entire banking procedures of IFIC Bank Limited and finally a study on a particular area. 1.3: Objective of the Study: The primary objective of this report is to comply with the requirement of the IFIC Bank Ltd. However, the objective behind this study is......

Words: 5565 - Pages: 23

Premium Essay

Bank

...Meaning of Bank Bank is a financial intuition, which is engaged in monitory transaction. Bank has always been the most importance and largest financial intermediates. A bank is an institution, which deals with money and credit. It accepts deposits from the public and mobilizes the fund to productive sectors. It also provides the remittance facility to transfer money from one place to another. Bank is therefore, known as a dealer of money. In addition to this, bank may be engaged in different types of functions such as exchange currency, joint venture, underwriting, bank guarantee, discounting bills etc. Bank is also the principal source of credit for individuals, organization and government. Finally, we can say that bank is the financial institution providing all kind of monetary services that is necessary for the industrialization and development of a country. Importance meanings are as follows According to Walter leaf "A bank is that institution or individual who is always ready to service money on Deposit to be returned against the cheque of their depositor.” According to Prof. Kinley “A bank is an established which makes to individuals such advances of money as may be required safer made and to which individuals entrust money when not required for use.” According to Harace White “Bank is a manufactures of credit and machine for facilitating exchanges” According to Dr. H.L. Hart“A bank is one who in the ordinary course of his business receives money which he repays...

Words: 344 - Pages: 2

Premium Essay

Bank

...money just thru ATM to ATM. Despite all of the good thing of the banking service. I’ve experience the worse one. If I’m not mistaken, on Thursday, August 23, 2007 around 15:46 pm, I make cash withdrawals at ATMs BNI (Bank Negara Indonesia or Indonesian Bank) branch Klampis Surabaya Rp1,000,000, but it was came out only Rp950.000, though my bank account already count 1,000,000 as withdrawal. I report directly to the customer service BNI branch Klampis and asked to complete written reports. On Monday, August 27, 2007, when I have some savings on print book teller BNI, listed 50,000 refund on August 24, 2007. But, August 28, 2007 when I re-requested printed, 50,000 of money, it has taken / credited back. According to customer service BNI, it happened because it was considered there was no difference in the ATM transaction otherwise altered so successful and did not return my money. Although there were not many, but nevertheless I still impaired by ATM BNI. Previously, I have also experienced a similar ugly incident at the ATM BCA (Bank Central Asia) with a lack of money is greater. Around May 15, 2009, I withdraw cash at BCA ATM in Jakarta about Rp1,000,000 but in fact, money that comes out just Rp250,000 or less Rp750,000 whereas the contents of my bank account has been reduced Rp1.000.0000. I immediately make a report by phone to the BCA Access Center. Furthermore, I also suggested make repeated telephone and written report on the BCA branch, the exact location......

Words: 431 - Pages: 2

Premium Essay

Bank

...Services offered by Nepalese Commercial Banks Introduction The term bank is either derived from old Italian word banca or from a French word banque both mean a Bench or money exchange table. In olden days, European money lenders or money changers used to display (show) coins of different countries in big heaps (quantity) on benches or tables for the purpose of lending or exchanging. A bank is a financial institution which deals with deposits and advances and other related services. It receives money from those who want to save in the form of deposits and it lends money to those who need it. A financial institution licensed as a receiver of deposits. There are two types of banks: commercial/retail banks and investment banks. In most countries, banks are regulated by the national government or central bank. Commercial banks are mainly concerned with managing withdrawals and deposits as well as supplying short-term loans to individuals and small businesses. Consumers primarily use these banks for basic checking and savings accounts, certificates of deposit and sometimes for home mortgages. Investment banks focus on providing services such as underwriting and corporate reorganization to institutional clients. According to Nepal Company Act 2031 B.S, a commercial bank refers to such type of bank which deals in money exchange accepting deposit advance loan and commercial transaction except specific banking related to co-operative agriculture industry and other objective.......

Words: 1485 - Pages: 6

Premium Essay

Banks

...What are Banks? Banks are the largest lending institutions through out the globe; the basic purpose of banks is to secure money of the people/organizations and to lend the money to the people/organizations as a creditor/lender. When they start returning money back to the bank either at once or in portions take interest on it. This interest is the prime source of the banks profit; interest is also known as “Usury”. The History of Banks The history of banks is old, but it is not exactly in that form which today we have, as we developed the way of banking and other related features are also changed. Initially people store money in the royal palaces and temples, at that time there were no concept of money they secure their grains and other commodities into it, the reason behind this they feel that these places are very secure and the chance of robbery or theft is very less as compare to secure in there own houses. Banking Today Today banks are playing very essential role in our country economy as well as in global economy; they are giving loans to the organization and individuals, trying to make humans life easier and developed. Without bank we cannot even think to live, for example how do you feel if someone says that I have one million or ten million dollar save in my cupboard locker, obviously you can laugh over the person wisdom? Now banks are providing greater facilities and constantly improving their standards day by day, Stronger security, locker facilities......

Words: 2772 - Pages: 12

Premium Essay

Bank

...Internship Report On Janata Bank Limited and Its General Banking Activities Internship Report On Janata Bank Limited and Its General Banking Activities Supervised by: Niluthpaul Sarker Assistant Professor Department of Accounting and Information systems Jagannath University Prepared by: Akash Kumar Ghosh ID: 114599(BBA) 6th Batch Department of Accounting and Information systems Jagannath University Date of Submission: 5th November, 2015 Letter of Transmittal Date: November 05, 2015 Niluthpaul Sarker Assistant Professor Department of Accounting and Information Systems Jagannath University Subject: Submission of internship report. Dear Sir, I would like to inform you that I have completed my internship report on the topic“General banking activities of Janata bank Ltd” of Bangladesh. I have completed my internship attachment period with Janata Bank Ltd. Preparing this report, I have collected information from all available sources in the most realistic and professional way. In writing this report, I have followed the instructions of my organization while at the same time consulting my institute supervisor. I have endeavored to the utmost potential and limited constraints to project the report as reflective as possible. I earnestly hope that this report will meet your specification would be delighted to furnish you with any clarification if required. Thanks and Regards Yours......

Words: 10042 - Pages: 41

Premium Essay

Bank

...for knowing about the performance of a bank.. Nowadays Banking companies are in a competitive market. They are choosing the differentiation strategy to be a market leader because cost leadership is not a good tool for competition due to oligopolistic market. By analyzing bank information system, this paper investigates the service quality perceptions of bank account holders. This paper also examine the relationship between relative importance allocated by respondents to each of the five SERVQUAL dimensions as measured by the points allocated to that dimensions the ratings provided for the individual items of the dimension.  In the SERVQUAL questionnaire there are 22 questions from five different dimensions. These are Tangibles, Reliability, Responsiveness, Assurance and Empathy. These questions measure the gap between employees’ expectations and perceptions .After conducting the survey I have found some values. I have made an analysis with these values. I have calculated the weighted average scores of these values from the perspective of these branches. Then it has been seen that the gap between the employees’ expectations and perceptions about the services is lower for the customers. In my report I got reliability, responsibility and assurance is very much valuable to customers compare to others. Company Profile COMPANY BACKGROUND   Dutch-Bangla Bank Limited (the Bank) is a scheduled commercial bank. The Bank was established under the Bank Companies Act 1991 and incorporated......

Words: 48046 - Pages: 193

Premium Essay

Bank

...Departments In A Bank As soon as it becomes necessary, on account of volume of business, to divide the work in a bank into divisions, each employing a group of clerks, such division is organized into a department having a department head who is usually a teller, a head bookkeeper, or perhaps a junior officer. In the very large banks the executive staff is itself organized into groups, and there may be a vice - president and one or two assistant cashiers in charge of each important department. The work of a department in a large bank is nothing more nor less than the work of a single man in a small bank, apportioned among several men. For example, the receiving teller in a five-man bank will take the deposit, count the cash, examine the checks, assort them as to place payable, enter them upon the proper records and make a settlement or proof at the end of the day. In a large bank each of these operations is performed by a different man or group of clerks under the direction of the receiving teller, who is head of the department. It may be that he himself will do very little if any of the detail work. He becomes the manager. Frequently we find a department within a department, as for example, the money department within the paying teller's department. The ordinary departments, classified as to group, may be described as follows: Paying Teller's Department (Teller): Pays or certifies checks. In charge of the signature book or cards bearing the authorized signatures of all......

Words: 767 - Pages: 4

Premium Essay

Bank

...interdependence. as well as it is a time of fulfilling the all expectation by having cards facility( Credit card and ATM card) and loan(Car loan, Personal loan and Home loan). Now a day taking loan has become a medium for buying the comfort and with this thought Dhaka Bank LTD. (DBL) is offering passive offer towards the customers compare to the other commercial bank, so that DBL can contribute over the desirability of the customer .and it has become possible through offering lower inertest rate over the asset produce and higher interest rate over the liability product. Credit card is an electronic based plastic card bearing an account number assigned to a cardholder with a credit limit that can be used to purchase goods and pay for services with a credit facility and without cash/currency note transactions. Dhaka Bank Ltd (DBL) offers the Dhaka Bank – VISA co-branded credit card and is considering the potentiality to grow in its existing credit card Business. The report has been prepared by focusing over the analyzing the performance of the Retail Banking Division. 2. BROAD OBJECTIVE The broad objective of the study is to raise the real picture of retail banking division, moreover draw a comparative picture of Dhaka Bank credit card and identify the trend of the credit card customers to find the loop hole of the existing service provided by the DBL. 3. SPECIFIC...

Words: 14210 - Pages: 57