Beruflich Dokumente
Kultur Dokumente
Bank Statement
• A bank statement is a report prepared by the bank which shows the deposits made, checks
paid, and other charges and credits recorded by the bank for the month as well as the cash
balance per bank records.
• A bank statement is prepared only for demand or checking accounts.
• A bank statement is prepared once a month.
Bank Reconciling Items (Captured by the book but not yet by the bank)
1. Outstanding Checks (-): checks not yet encashed
2. Deposits in transit (+)
3. Bank errors (+/-)
Book Reconciling Items (Captured by the bank but not yet by the books)
1. Bank charges (-): example - bank deducted service fee for check
2. Notes collected by the bank (+): client paid to the bank, not to the owner
3. Not sufficient funds (NSF) checks (-): bank did not increase their amount
4. Book errors (+/-)
5. Interest earned (+)
Bank Reconciliation
• A bank reconciliation is a schedule prepared by the business explaining the difference between
the bank’s and the company’s record of cash.
• is is prepared once a month upon receipt of the bank statement.
• ere are three methods of preparing bank reconciliation.
a. Book to bank method
b. Bank to book method
c. Adjusted balances method
• Prepared by an individual who neither handles nor records cash.
• Periodic bank reconciliations can help identify any cash errors or irregularities that have
occurred in accounting for cash either by the business unit or the bank.
• Most differences in bank and book balances for cash are “normal” and are the result of
temporary timing lags.
a. Deposit in transit - a deposit near the end of the month that reduce the cash balance but
have not yet cleared the bank (these are deducted from the bank statement balance in
getting to the corrected cash balance).
b. Outstanding checks
c. Bank service charge
d. Not sufficient funds (NSF)
e. An amount owed to the depositor and paid directly to the bank by a third party, such as
a direct payroll deposit by an individual’s employer or interest
f. An amount owed by the depositor to a third party and draed directly out of the
depositor’s account, such as a transfer to a savings plan (deducted from the cash balance
on the depositor’s books in getting to the corrected cash balance).
Reconciling Items
ABC Company
Bank Reconciliation
December 31, 20YY
Sub-total P xxx
Sub-total P xxx
Sub-total P xxx
Adjusting Entries
1. Adjusting entries for book reconciling items and errors of depositor should be prepared in the
books of the business.
2. is is necessary to bring the cash in bank balance to its correct balance for balance sheet
presentation.