# BANK RECONCILIATION PROBLEMS PROCESS

Process:
1. Determine the cash per book balance and cash per bank balance
Cash per book balance show the cash records of the company, normally it shows cash receipts
journal and cash disbursement journal
Cash per bank balance shows the bank statement of the company; normally it shows withdrawals,
deposit, etc.
2. Compare the balances of each to check if the cash per book balance items reflect on the cash
per bank balance items, vice versa. If not, note the reconciling items of each to be
deducted/added to each, refer to the reconciling items of adjusted balance method.
3. Reconciling items of adjusted balance method
Book Balance
Total
Less: DM
xx
xx
xx
xx
xx
Bank balance
Total
Less: OC
xx
xx
xx
xx
Illustration:
Cash Receipts
5-Jan
60,000
13
20,000
25
30,000
31
40,000
150,000
CASH PER BOOK BALANCE
Cash Disbursements
6-Jan Check No. 721
5,000

7 Check No. 722
10,000

10 Check No. 723
18,000

bank
14 Check No. 724
2,000
28 Check No. 725
31 Check No. 726




*RI; deduct to
37,000 bank
*RI; deduct to
28,000 bank
100,000
CASH PER BANK BALANCE
Check
Date No.
Withdrawals
Deposits
6Jan
60,000
8
721
5,000 
11
722
10,000 
12
723
18,000 
14
20,000
17
724
2,000 
30,000
15,000
26
CM
26
30
5,000 RT
*RI; deduct to book
30
1,000 SC
*RI; deduct to book
Balance



60,000
55,000
45,000
27,000
47,000
45,000
75,000
90,000
85,000
84,000
Total
Less: NSF Customer Check
5,000
Service Charge
1,000
Total
Less: Outstanding Checks:
Check No. 725
Check No. 726
50,000
15,000
65,000
6,000
59,000
84,000
40,000
124,000
37,000
28,000
65,000
59,000
*The unadjusted book balance was taken from deducting cash receipts and cash disbursements. The
unadjusted bank balance was taken from the ending balance in the bank statement.
*The reconciling items of the adjusted balance method was the proforma based
a. To record the note collected by the bank
Cash in bank
Notes receivable
15,000
15,000
b. To record the NSF customer check
Accounts Payable
Cash in bank
5,000
c. To record the bank service charge
Bank service charge
Cash in bank
1,000
5,000
1,000
Book to bank method
Book balance
50,000
15,000
OC
65,000 80,000
Total
130,000
Less: DM
6,000
DIT
40,000 46,000
84,000
Bank to book method
Bank balance
84,000
40,000
DM
6,000 46,000
Total
130,000
Less: OC
65,000
CM
15,000 80,000
50,000
BOOK TO BANK AND BANK TO BOOK METHOD OF BANK RECONCILIATION
Process:
*Identify the reconciling items in each; bank and book.
Reconciling Items
1. Book reconciling items
- Credit memos
- Debit memos
- Error *If error is committed by the book; therefore it is a book error, vice versa.
2. Bank reconciling items
- Deposits in transit
- Outstanding Checks
- Errors *If error is committed by the bank; therefore it is a bank error, vice versa.
*Afterwards refer to the book to bank method and bank to book method for reference of add/less
Book to bank method
Book balance
OC
Total
Less: DM
DIT
xx
xx
xx xx
xx
xx
xx xx
xx
Bank to book method
Bank balance
DM
Total
Less: OC
CM
xx
xx
xx xx
xx
xx
xx xx
xx
Take note of the starting balances, when it starts with book balance, use book to bank method
first and vice versa
Sample problem 1:
R.I
Balance per bank statement
Bank
Deposit in transit
Bank
Amount erroneously credited by bank to case account Bank
Bank service charge for December
Book
NSF check
Book
Outstanding checks
Bank
Bank to book method
Deposit in transit
Amount erroneously credited by bank to case
account
Outstanding checks
Book to bank method
CM
OC
DM
DIT
3,800,000
520,000
40,000
5,000
50,000
675,000
3,800,000
520,000
-40,000
-675,000
3,605,000
?
0
0
-55,000
0
3,605,000
Workback
CM
OC
DM
DIT
*3,605,000 + 55,000 = 3,660,000
?
(3,660,000)
0
0
-55,000
0
3,605,000
Sample problem 2:
Balance per book
Bank service charge *Debit memorandum
Outstanding checks
Deposits in transit
Customer note collected by the bank *Credit Memo
Interest on customer note *Credit Memo
Customer check returned NSF *Debit memo
Depositor's payment of note payable charged to account
*Cash disbursement; unrecorded by book
Boot to bank method
Bank service charge
Customer note collected by the bank
Interest on customer note
Customer check returned NSF
Cash disbursement unrecorded by book
Bank to book method
DIT
DM
OC
CM
R.I
Book
Book
Bank
Bank
Book
Book
Book
Book
1,000,000
-3,000
375,000
15,000
-62,000
-250,000
1,075,000
?
300,000
-235,000
1,000,000
3,000
235,000
300,000
375,000
15,000
62,000
250,000
Workback
DIT
DM
OC
CM
*1,075,000 + 235,000 - 300,000 = 1,010,000
1,075,000
?( 1,010,000)
300,000
-235,000
1,075,000