CHAPTER 11
BANK STATEMENTS
I.E. UPDATING THE CASH BOOK
AND BANK RECONCILAIATION
STATEMENTS
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Bank statements
 A bank statement is a
copy of the bank’s
record of a customer’s
transactions with the
bank. It is sent to the
customer periodically
by the bank.
 This should be
compared with the
customer’s cash book.
R. Delaney
Comparing Bank Statements with
Cash Book
When comparing the bank statement with the
cash book you should draw up two lists:
1. A list of the items that are in the bank
statement that are not in the cash book. This
is used to bring the cash book up to date
2. A list of the items that are in the cash book
that are not in the bank statement. This is
used to draw up the Bank Reconciliation
Statement

R. Delaney
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Example: Question No. 6 page 112
 The list of the items that are in the bank
statement but not in the cash book
– 3rd. Direct Debit ESB, €95 (Dr)
– 7th. Paypath €1,000 (Cr)
– 9th. Credit transfer €500 (Cr)
– 12th. Bank charges €15 (Dr)
The debit items are entered on the credit side
of the Cash Correction A/C (Updated Cash
Book) while the credit items are entered on
the debit side
R. Delaney
Cash Correction A/C or Updating
the Cash Book
1st Closing balance as per cash book €2,435
3rd. Direct Debit ESB, €95 (Dr)
7th. Paypath €1,000 (Cr)
9th. Credit transfer €500 (Cr)
12th. Bank charges €15 (Dr)
CASH CORRECTION A/C AT 14/09/11
1
Balance as
per cash book
€2,435 3
DD ESB
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Paypath
€1,000 12 Bank charges
9
CT
€500 14 Correct cash bal
€3,935
R. Delaney
€95
€15
€3,825
€3,935
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Bank Reconciliation Statement (1)
 The list of the items that are in the cash book
but not in the bank statement
10th. Cheque No. 3 €350
12th. Cheque No. 4 €215
14th. Lodgement €1,000
R. Delaney
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Bank Reconciliation Statement (1)
14th. Lodgement €1,000
10th. Cheque No. 3 €350
12th. Cheque No. 4 €215
Balance as per bank statement
€3,390
Plus lodgements not credited
Lodgement of 14th
€1,000
€4,390
Less cheques not yet presented
Cheque No. 3
€350
Cheque No. 4
€215
Correct cash balance
R. Delaney
€565
€3,825
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Bank Reconciliation Statement (2)
14th. Lodgement €1,000
10th. Cheque No. 3 €350
12th. Cheque No. 4 €215
Correct cash balance
€3,825
Less lodgements not credited
Lodgement of 14th
€1,000
€2,825
Plus cheques not yet presented
Cheque No. 3
€350
Cheque No. 4
€215
Balance as per bank statement
R. Delaney
€565
€3,390