Bank Reconciliation Statement

Front

What is a Bank Reconciliation Statement?

Back

A summary of banking and business activity that reconciles an entity’s bank account with its financial records, outlining deposits, withdrawals, and other activity impacting a bank account for a specific period.

Front

Why is a Bank Reconciliation Statement important?

Back

It helps identify errors in accounting records, protects cash assets by uncovering irregularities, confirms the correctness of bank transactions, and assists in monitoring cash flows.

Front

What are some reasons for differences between cash book and pass book?

Back

1. Outstanding checks not presented for payment. 2. Checks received but not collected by the bank. 3. Direct deposits made by customers. 4. Collection and service charges by the bank. 5. Interest credited by the bank.

Front

What are the causes of disagreements between cash book and pass book?

Back

1. Checks issued but not paid. 2. Checks deposited but not collected. 3. Direct deposits by debtors. 4. Income collected by the bank. 5. Interest on deposits. 6. Expenses paid directly by the bank. 7. Bank charges. 8. Errors and omissions.

Front

What transactions usually appear in company's records but not in the bank statement?

Back

1. Deposits in transit. 2. Outstanding checks.

Front

What transactions usually appear in bank statement but not in company's cash account?

Back

1. Service charges. 2. Interest income. 3. NSF checks (Not sufficient funds).

Front

Customer Directly Deposited on the bank account?

Back

PB +

Front

Cheque Issued but not presented for payment.

Back

CB -

Front

Debit Side of the Cash book undercast.

Back

CB -

Front

Cheque deposited but not credited by bank

Back

CB +