Bank Reconciliation Statement.

Bank Reconciliation Statement.

Introduction:

Now a days banking sector is closely attached with the business. Every Business

have their accounts in banks. Bank Prepare a statement for the account of the business in

bank which is send by the bank to the owner of the account at the end of a specific period.

Business Also keep the record for bank account in their own book. When bank send the

statement and business receive that statement there are some difference between the bank

statement balance and business cash book balance to recover and omit these balances a

statement is prepared by a business which is known as bank Reconciliation statement.

Definition:

"A statement which is prepared to find out the reasons for disagreement between the

bank statement balance and the cash book balance of the bank, and to test whether the

apparently conflicting balance do really agree is known as Bank Reconciliation Statement

"

Why Bank Reconciliation Statement is Prepared :

 Compare transactions that appear on both Cash Book and Bank Statement.

 Update Cash Book from details of transactions appearing on Bank Statement.

 Balance the bank columns of the Cash Book to calculate the revised balance.

Reason for difference between bank statement and cash book :

There are many reasons for the difference between bank statement and cash book but

most impotent reasons are as Follow:

  Lack of time.

 Lack of Information

 Errors.

How the difference can be eliminated:

"Balance per bank"

 ( + ) Deposit in transit.

 ( - ) Outstanding checks.

 (+, -) Bank Adjustments.

" Balance per depositor "

 ( + ) Deposit by bank.

 ( - ) Service Charges.

 ( - ) Nsf Checks.

 (+,-) Book adjustments.

Conclusion :

At the end we can conclude that the Bank Reconciliation Statement explains the

difference between cash reported on bank statement and cash balance in depositors

accounting records.