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Bank reconciliation statement is a report
which compares the bank balance as per
company's accounting records with the
balance stated in the bank statement
The term reconciliation simply means to
bring together
One reason may due to ERRORs made by the
company or by bank. But there are many
other reasons that cause the difference.
BANK STATEMENT
CASHBOOK
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Cheques Outstanding/Unpresented cheques (Cr.): cheques
which have been issued by the company but were not
presented or cleared before the issuance of bank
statement.
Deposits in Transit (Cr.): Deposits which have been sent by
the company to the bank but have not been received by
the bank at proper time before the issuance of bank
statement. (bank lodgement not yet credited)
Dishonoured cheques (Dr.): These are the cheques
deposited by the company in bank account but the bank
has failed to ‘honour’ the cheque. May due to :
◦ NSF cheque = not sufficient funds
◦ Stale cheque = cheque presented at the paying bank after a
certain period (typically six months) of its payment date
◦ Signature does not match, error in wordings of amount etc.
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Service Charges (Cr.): Service charges may
have been deducted by the bank. Such
charges are usually not known to the
company before the issuance of bank
statement.
Interest Income (Dr.): If any interest income
has been earned by the company on its bank
account, it is not usually entered in
company's cash account before the issuance
of bank statement.
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Standing Orders (Cr.): an instruction a firm gives
to the bank to pay a set amount at regular
intervals to another's account.
Direct Debit (Cr.): an authorization to the
creditors, typically used for recurring payments,
such as utility bills, where the payment amounts
vary from one payment to another
Credit transfers (Dr.): amounts being paid
directly into our bank account. They are normally
from other customers, or other people who owe
the firm money
Company A
Bank Reconciliation
December 31, 2011
Balance as per cash book
Add:
Interest Income
Credit Transfer
19,000.00
234.00
134.00
Less:
Dishonoured Cheque
Service Charge
Direct Debit
Standing Order
543.00
254.00
321.00
987.00
Balance in statement of financial position
Less: Deposit in Transit
Add: Outstanding Cheque
Balance as per bank statement
Confirm this figure by referring to Bank Statement
368.00
19,368.00
(2,105.00)
17,263.00
(865.00)
654.00
17,052.00
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OTHER FORMAT:
Company A
Bank Reconciliation
December 31, 2011
Balance as per cash book
Add:
Interest Income
Credit Transfer
19,000.00
234.00
134.00
Less:
Dishonoured Cheque
Service Charge
Direct Debit
Standing Order
543.00
254.00
321.00
987.00
368.00
19,368.00
Adjusted balance as per cash book
(2,105.00)
17,263.00
Balance as per bank statement
17,052.00
Add: Deposit in Transit
Less: Outstanding Cheque
Adjusted Balance as per bank statement
865.00
(654.00)
17,263.00
This format is to prepare the adjustment of both cashbook and bank statement. So
there will be a balancing figure. Whereas, the first format is to show the agreement
btw the balance of cashbook and bank statement.